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Note 4. Loss on Storage Tank Disposal
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Mar. 31, 2012
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| Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] |
4. LOSS
ON STORAGE TANK DISPOSAL
For
the year ended March 31, 2011, we recorded a total net gain
of approximately $248,000 related to the disposal of
assets. These activities are primarily due to the
demolition of six unused tanks at the Westwego Terminal to
make way for future construction of larger
tanks. This activity resulted in a non-cash net
loss of approximately $172,000.
On
February 9, 2009 one of our storage tanks developed a minor
leak during the introduction of product (sulfuric acid) into
the tank. Terminal staff detected the leak
and successfully contained it in the designated earthen
berm area and immediately contacted all required federal,
state and local authorities and agencies about the
situation. Shortly thereafter, we began
remediation and cleanup efforts and engaged expert
environmental cleanup companies to assist with the
process. While the cleanup effort was ongoing, the
product was transferred into rented barges specifically
designed for sulfuric acid. Related to this
incident, during the year ended March 31, 2011, we recorded
the receipt of $260,000 as a settlement payment from our
pollution insurance carrier, a reduction in account payable
invoices from our major subcontractor of approximately
$168,000 and legal expenses of approximately $7,500, totaling
a net gain of $420,187.
As
of March 31, 2011, approximately $410,000 of liabilities
related to this event was included in the current section of
our consolidated balance sheet listed as Liabilities-disposal
of asset. As of March 31, 2012, this amount was
$0.
The
insurance carrier reimbursements, our net repairs, cleanup,
and our other expenses related to the tank leak incident in
February 2009 are recorded as a gain or (loss) on disposal of
assets to the extent that the loss was not recoverable
through insurance. The table below summarizes the
cumulative activity related to this incident.
Insurance
recovery is shown net of a $275,000 deductible.
The
underside of the tanks’ steel bottoms, related pumps
and valves and the surrounding containment areas were damaged
when they came in contact with the leaked sulfuric product
during the remediation and cleanup process. The
tank bottom was replaced and we recognized a loss on disposal
of tank totaling $83,678 for the year ended March 31,
2009. There were no tank leaks in other periods
presented.
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