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CONTINGENCIES | 12 Months Ended
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Jan. 31, 2016
CONTINGENCIES |
CONTINGENCIES | NOTE 14 — CONTINGENCIES In the normal course of business, the Company may have pending claims and legal proceedings. It is the opinion of management, based on information available at this time, that there are no current claims and proceedings that could have a material effect on the Company’s consolidated financial statements other than those discussed below. The material amounts of any legal fees expected to be incurred in connection with legal matters are accrued when such amounts are estimable. Altra Matter GPS provided engineering, procurement and construction services related to an anhydrous ethanol plant in Nebraska (the “Project”). The owner of the Project was ALTRA Nebraska, LLC (“Altra”). In November 2007, GPS and Altra agreed to a suspension of the Project while Altra sought to obtain financing to complete the Project. By March 2008, financing had not been arranged which terminated the construction contract prior to completion of the Project and GPS filed a mechanic’s lien against the Project in the approximate amount of $23,800,000, which amount included sums owed to subcontractors/suppliers of GPS and their subcontractors/suppliers. Several other claimants also filed mechanic’s liens against the Project. In August 2009, Altra filed for bankruptcy protection. Proceedings resulted in a court-ordered liquidation of Altra’s assets. The incomplete plant was sold at auction in October 2009. As of January 31, 2015, the remaining net proceeds of $5,500,000 were being held by the bankruptcy court and had not been distributed to Altra’s creditors. During a mediation session that occurred in April 2015, the parties with lien claims being considered by the bankruptcy court executed a settlement agreement pursuant to which the Company received a payment of $1,600,000 in May 2015 from the proceeds deposited with the bankruptcy court. The court was advised of the mediation result, and this matter was dismissed. PPS Engineers Matter On February 1, 2016, Roberts was sued in Person County, North Carolina, by a subcontractor, PPS Engineers, Inc. (“PPS”), in an attempt to force Roberts’ to pay invoices for services rendered. The amount claimed by PPS in this lawsuit approximates $749,000. PPS has placed liens on the property of the customers where work was performed by PPS and it has also filed a claim against the bond issued on behalf of Roberts relating to one significant project located in Calhoun, Tennessee in the amount of $1,569,000. On March 4, 2016, Roberts filed responses to the claims of PPS. The positions of Roberts are that PPS failed to deliver a number of items required by the applicable contract between the parties and that the invoices rendered by PPS covering the disputed services will not be paid until such deliverables are supplied. Further, Roberts maintains that certain sums are owed to it by PPS for services, furniture, fixtures, equipment, and software that were supplied by Roberts on behalf of PPS that total $2,473,000. The amounts invoiced by PPS were accrued by Roberts and the corresponding liability amount was included in accounts payable in the consolidated balance sheet as of January 31, 2016. Roberts has not recorded an account receivable related to its counterclaims. The Company intends to defend against the claim of PPS and to pursue its claims against PPS with vigorous efforts. Due to the uncertainty of the ultimate outcomes of these legal proceedings, assurance cannot be provided by the Company that Roberts will be successful in these efforts. However, management does not believe that resolution of the matters discussed above will result in additional loss with material negative effect on the Company’s consolidated operating results in a future reporting period. Self-Insurance Roberts has elected to retain portions of future losses, if any, through the use of self-insurance for exposures related to workers’ compensation and employee health insurance claims. Liabilities in excess of contractually limited amounts are the responsibilities of an insurance carrier. To the extent that the Company is self-insured for these exposures, including claims incurred but not reported, reserves have been provided based upon the Company’s best estimates, with input from legal and insurance advisors. Changes in assumptions, as well as changes in actual experience, could cause these estimates to change in the near-term. Management believes that reasonably possible losses, if any, for these matters, to the extent not otherwise disclosed and net of recorded reserves, will not have a material adverse effect on our future results of operations, financial position or cash flow. At January 31, 2016, the aggregate amount reserved and included in the balance of accrued expenses in the consolidated balance sheet was $1,299,000.

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