Avnet 2003 Annual Report Download - page 22
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Please find page 22 of the 2003 Avnet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.investigation and cleanup of groundwater. The Company agreed to be responsible for 30% of the groundwater
investigation and cleanup costs. In October 1993, the Company and the former owners entered into a Consent
Decree and Court Order with the Environmental Protection Agency (the ""EPA'') for the environmental
clean-up of the site, the cost of which, according to the EPA's remedial investigation and feasibility study, was
estimated to be approximately $6.3 million, exclusive of the approximately $1.5 million in EPA past costs paid
by the potentially responsible parties (""PRPs'').
In September 2002, the Company's subsidiary, Sterling Electronics, Inc. (""Sterling''), was added as a
defendant in an existing lawsuit Ñled in the Superior Court of California, County of Los Angeles, by property
owners and residents in or near the San Gabriel Valley Superfund Site. This master case is a consolidation of
six diÅerent matters Ñled during the period from July 1997 through November 2001. Sterling once owned
92.46% of the capital stock of Phaostron, Inc., which has been named as a PRP for contamination at the site.
In March 2003, the court dismissed all six cases on technical grounds, but allowed the plaintiÅs the
opportunity to properly serve newly-added industrial defendants, including Sterling, in any case not yet outside
the mandatory service period. In four of the six cases, the applicable service period has expired. Sterling,
therefore, cannot be re-added to those cases as a defendant. In the remaining two cases, the plaintiÅs have
until January 1, 2004 and November 30, 2004, respectively, to re-add Sterling as a defendant in the master
case and properly perfect service of process on Sterling. Those plaintiÅs have not indicated a monetary amount
sought in this matter. The Company believes that Sterling has meritorious defenses to liability, and, although
the ultimate outcome is uncertain, based on current information, the Company does not believe that its
liability for this matter, if any, will be material to its Ñnancial position, cash Öow or results of operations.
The Company is a PRP at a manufacturing site in Huguenot, New York currently under investigation by
the New York State Department of Environmental Conservation (""NYSDEC''), which site the Company
owned from the mid-1960s until the early-1970s. The estimated cost of the Ñrst phase of the environmental
clean-up (to remediate contaminated soils), is approximately $2.4 million based on a NYSDEC cost estimate.
The Company is currently engaged in litigation to apportion these costs among it and the current and former
owners and operators of the site. Based on current information, Avnet does not anticipate its liability in the
matter will be material to its Ñnancial position, cash Öow or results of operations.
Based on the information known to date, management believes that the Company has appropriately
accrued in its consolidated Ñnancial statements for its share of the costs associated with these environmental
clean-up sites.
The Company and/or its subsidiaries are also parties to various other legal proceedings arising from time
to time in the normal course of business. While litigation is subject to inherent uncertainties, management
currently believes that the ultimate outcome of these proceedings, individually and in the aggregate, will not
have a material adverse eÅect on the Company's Ñnancial position, cash Öow or overall results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
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