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Note 9 - Legal Proceedings
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6 Months Ended |
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Feb. 29, 2012
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| Notes To Financial Statements | |
| Legal Matters and Contingencies [Text Block] |
NOTE
9 LEGAL PROCEEDINGS
On
December 19, 2011, the Company and the District filed a lawsuit
against the State of Colorado by and through the Land Board. The
complaint was filed with the District Court, City and County of
Denver, Colorado. The Company and the District are claiming that
the Land Board breached, and will breach, agreements entered into
by the Land Board with the Company and the District in connection
with a 1996 settlement agreement. Those agreements include the
Amended and Restated Water Lease, dated as of April 4, 1996,
between the Land Board and the District and the Service Agreement
of the same date between the Company and the District. As
initially reported in a Current Report on Form 8-K filed on
November 29, 2011, the Land Board issued a Request for Proposal
that included a draft lease agreement related to oil and gas
rights at the Land Boards Lowry Range. The
Company believes the draft lease agreement did not adequately
address or protect the Companys exclusive right to provide
water to the Lowry Range. As a result of this breach, the Company
and the District are claiming damages which will be proven at
trial.
As
disclosed in two Form 8-Ks, one filed on February 16,
2012 and one filed on February 29, 2012, HP A&M initiated a
lawsuit against the Company alleging breaches of
representations made in connection with the Arkansas River
Agreement. HP A&M claims relate to the issues
currently being litigated between the Company and the Land
Board regarding the Companys exclusive right to provide
water service to the Land Boards Lowry Range
property.
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