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Note 9 - Legal Proceedings
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9 Months Ended |
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May 31, 2012
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| Legal Matters and Contingencies [Text Block] |
NOTE
9 – LEGAL PROCEEDINGS
As
discussed in a Form 8-K filed on December 19, 2011, on that
date 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, State of 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 Board’s Lowry Range. The
Company believes the draft lease agreement did not adequately
address or protect the Company’s 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-K’s, one filed on February 16,
2012 and one filed on February 29, 2012, HP A&M initiated
a lawsuit against the Company in District Court, City and
County of Denver, State of Colorado on February 27, 2012
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 Company’s
exclusive right to provide water service to the Land
Board’s Lowry Range property.
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