Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2013 |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
8. COMMITMENTS AND CONTINGENCIES |
|
We have been identified by the United States Environmental Protection Agency (“EPA”), state governmental agencies, or other private parties as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) or equivalent state or local laws for clean-up and response costs associated with certain sites at which remediation is required with respect to prior contamination. Because CERCLA has generally been construed to authorize joint and several liability, the EPA could seek to recover all clean-up costs from any one of the PRPs at a site despite the involvement of other PRPs. At certain sites, financially responsible PRPs other than AVX also are, or have been, involved in site investigation and clean-up activities. We believe that any liability resulting from these sites will be apportioned between AVX and other PRPs. |
|
To resolve our liability at the sites at which the Company has been named a PRP, we have entered into various administrative orders and consent decrees with federal and state regulatory agencies governing the timing and nature of investigation and remediation. As is customary, the orders and decrees regarding sites where the PRPs are not themselves implementing the chosen remedy contain provisions allowing the EPA to reopen the agreement and seek additional amounts from settling PRPs in the event that certain contingencies occur, such as the discovery of significant new information about site conditions. |
|
In 1991, in connection with a consent decree finally approved in 1992 (“1992 Consent Decree”), we paid $66,000, plus interest, toward the environmental conditions at, and remediation of, New Bedford Harbor in the Commonwealth of Massachusetts (“the harbor”) in a settlement with the United States and the Commonwealth of Massachusetts (sometimes the “Governments”), subject to reopener provisions, including a reopener if certain remediation costs for the site exceed $130,500. |
|
On April 18, 2012, the EPA issued to the Company a Unilateral Administrative Order (the “UAO”) directing the Company to perform certain remedial actions for the harbor clean-up pursuant to the reopener provisions. |
|
On October 10, 2012, the EPA, the United States, the Commonwealth of Massachusetts and AVX announced that they had reached a settlement with respect to the EPA’s ongoing clean-up of the harbor. That agreement is set forth in a Supplemental Consent Decree (“Supplemental CD”) that modifies certain provisions of the 1992 Consent Decree, including elimination of the Governments’ right to invoke any clean-up reopener provisions in the future. Under the terms of the settlement, AVX was obligated to pay $366,250, plus interest computed from August 1, 2012, in three installments over a two-year period for use by the EPA and the Commonwealth to complete the clean-up of the harbor. The settlement also required the EPA to withdraw the UAO. The United States District Court approved the settlement and entered the Supplemental CD on September 19, 2013. |
|
On October 18, 2013, the Company paid the initial settlement installment of $133,350, plus accrued interest on the entire settlement amount through that date into a court-managed registry account. Following expiration of the time period for the appeal of the court’s approval of the settlement, such funds were disbursed to the various governments. In accordance with the terms of the Supplemental CD, AVX is obligated to pay $110,817, plus interest, on September 19, 2014 and $122,083, plus interest, on September 21, 2015. AVX has the option to prepay any portion of the remaining settlement balance at any time prior to the due dates of the remaining installments. |
|
We had reserves of approximately $380,354 and $246,718 at March 31, 2013 and December 31, 2013, respectively, related to the various matters discussed above. These reserves are classified in the Consolidated Balance Sheets as $147,454 and $124,635 in accrued expenses at March 31, 2013 and December 31, 2013, respectively, and $232,900 and $122,083 in other non-current liabilities at March 31, 2013 and December 31, 2013, respectively. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional legal and technical information that becomes available. Also, uncertainties about the status of laws, regulations, regulatory actions, technology, and information related to individual sites make it difficult to develop an estimate of the reasonably possible aggregate environmental remediation exposure. Therefore, these costs could differ from our current estimates. |
|
On November 27, 2007, a suit was filed in the South Carolina State Court by certain individuals as a class action with respect to property adjacent to our Myrtle Beach, South Carolina factory, claiming property values have been negatively impacted by alleged migration of certain pollutants from our property. Based on our estimate of potential outcomes, we have accrued approximately $350 with respect to this case as of December 31, 2013. |
|
During fiscal 2010, AVX was named as a third party defendant in a case filed in Massachusetts Superior Court captioned DaRosa v. City of New Bedford. This case relates to a former disposal site in the City of New Bedford located at Parker Street. The City asserts that AVX, among others, contributed to that site. We intend to vigorously defend the claims that have been asserted in this lawsuit. In light of the foregoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potential impact of this case on our financial position, results of operations, comprehensive income (loss), and cash flows cannot be determined at this time. |
|
AVX has received a demand for approximately $11,000 from the City of New Bedford arising from contamination at the City’s New Bedford Railyard. AVX believes it has meritorious defenses and intends to vigorously defend the demand. In light of the foregoing, we are not able to estimate any amount of loss or range of loss. No accrual for costs has been recorded and the potential impact of this demand on our financial position, results of operations, comprehensive income (loss), and cash flows cannot be determined at this time. |
|
We also operate on other sites that may have potential future environmental issues as a result of activities at sites during AVX’s long history of manufacturing operations or prior to the start of operations by AVX. Even though we may have rights of indemnity for such environmental matters at certain sites, regulatory agencies in those jurisdictions may require us to address such issues. Once it becomes probable that we will incur costs in connection with remediation of a site and such costs can be reasonably estimated, we establish reserves or adjust our reserves for our projected share of these costs. A separate account receivable is recorded for any indemnified costs. |
|
We are involved in disputes, warranty, and legal proceedings arising in the normal course of business. While we cannot predict the outcome of these disputes and proceedings, management believes, based upon a review with legal counsel, that none of these proceedings will have a material impact on our financial position, results of operations, comprehensive income (loss), or cash flows. |
|