World Fuel Services 2007 Annual Report Download - page 87

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ˆ1KGX9SH6MCKL=WW-Š
1KGX9SH6MCKL=WW
64435 TX 79WORLD FUEL SERVICES
ANNUAL REPORT
28-Feb-2008 00:14 EST
CLN PSTAM
RR Donnelley ProFile SER kirkw0cm 6*
PMT 2C
CHMFBUAC350855
9.9.26
WORLD FUEL SERVICES CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Legal Matters
Miami Airport Litigation
In April 2001, Miami-Dade County, Florida (the “County”) filed suit (the “County Suit”) against 17
defendants to seek reimbursement for the cost of remediating environmental contamination at Miami
International Airport (the “Airport”). We have previously reported that Page Avjet Fuel Co., LLC (“PAFCO”), a
limited liability company owned 50% by us and 50% by Signature Flight Support Corporation, was a defendant
in the County Suit. As of June 30, 2007, all claims against PAFCO in the County Suit were settled and released,
at no cost to us.
Also in April 2001, the County sent a letter to approximately 250 potentially responsible parties (“PRP’s”),
including World Fuel Services Corporation and one of our other subsidiaries, advising of our potential liability
for the clean-up costs of the contamination that is the subject of the County Suit. The County has threatened to
add the PRP’s as defendants in the County Suit, unless they agree to share in the cost of the environmental
clean-up at the Airport. We have advised the County that: (1) neither we nor any of our subsidiaries were
responsible for any environmental contamination at the Airport, and (2) to the extent that we or any of our
subsidiaries were so responsible, our liability was subject to indemnification by the County pursuant to the
indemnity provisions contained in our lease agreement with the County.
Should we be added to the County Suit, we would vigorously defend any claims, and we believe our
liability in these matters (if any) should be adequately covered by the indemnification obligations of the County.
Panama Litigation
In July 2005, Atlantic Service Supply, S.A. (“Atlantic”), a Panamanian fuel barge operator, filed suit against
Tramp Oil & Marine Limited (“TOM”), one of our subsidiaries, alleging that TOM is jointly and severally liable
for barging fees of approximately $1.0 million owed to Atlantic by Isthmian Petroleum Supply & Services, S.A.
(“Isthmian”). In July 2007, the court ruled against Atlantic, finding that TOM was not liable for any barging fees
owed to Atlantic by Isthmian. Isthmian has appealed this ruling. TOM and Isthmian were parties to an agreement
pursuant to which Isthmian provided storage, delivery and other fuel related services to TOM in Panama. In its
suit, Atlantic alleges (1) that Isthmian breached a barge charter agreement entered into between the two parties,
(2) that Isthmian entered into the agreement as an agent on behalf of TOM, and (3) that TOM is liable, as a
principal, for Isthmian’s breach of the agreement. Although TOM utilized the services of Isthmian for storage
and delivery of fuel, at no time did TOM request or authorize Isthmian to enter into any agreement with Atlantic,
nor did TOM request that Isthmian utilize Atlantic to provide services on its behalf. We do not believe that
Isthmian acted as TOM’s agent in its dealings with Atlantic, and we do not believe TOM is responsible for any
liabilities of Isthmian. We believe this suit is without merit and we intend to vigorously defend the action.
In August 2005, TOM filed a lawsuit against Isthmian seeking damages of approximately $3.1 million for
breach of contract and wrongful conversion of fuel owned by TOM. In September 2005, Isthmian filed a
counterclaim against TOM alleging that TOM is in breach of contract and seeking $5.0 million in damages.
These actions are pending in a Panamanian maritime court. We believe Isthmian’s suit against TOM is without
merit and we intend to vigorously defend the action.
Southeast Airlines Litigation
In November 2004, World Fuel Services, Inc. (“WFSI”), one of our subsidiaries, filed suit against Southeast
Airlines (“Southeast”), to recover amounts owed for jet fuel sold by WFSI to Southeast. In connection with the
Southeast litigation, WFSI sued additional parties claiming an interest in Southeast’s assets. One of these parties,
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