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Commitments and contingencies
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Dec. 28, 2013
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| Commitments And Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
| Commitments And Contingencies Disclosure Text Block | 19. Commitments and contingencies (a) Colorado Sun Oil Processing LLC dispute Colorado Mills and SunOpta Grains and Foods Inc. (formally Sunrich LLC, herein “Grains and Foods”), a wholly-owned subsidiary of the Company, organized a joint venture through CSOP. The purpose of the joint venture was to construct and operate a vegetable oil refinery adjacent to Colorado Mills' sunflower seed crush plant located in Lamar, Colorado. During the relationship, disputes arose between the parties concerning management of the joint venture, record-keeping practices, certain unauthorized expenses incurred on behalf of the joint venture by Colorado Mills, procurement of crude oil by Sunrich from Colorado Mills for processing at the joint venture refinery, and the contract price of crude oil offered for sale under an output term of the joint venture agreement. The parties initiated a dispute resolution process as set forth in the joint venture agreement, which Colorado Mills aborted prematurely through the initiation of suit in Prowers County District Court, Colorado on March 16, 2010. Subsequent to the filing of that suit, Colorado Mills acted with an outside creditor of the joint venture to involuntarily place the joint venture into bankruptcy. In August 2011, as part of the bankruptcy proceeding initiated in June 2010 in the U.S. Bankruptcy Court, District of Colorado, Colorado Mills purchased substantially all of the assets of the joint venture. A separate arbitration proceeding occurred between Grains and Foods and Colorado Mills to resolve direct claims each party asserted against the other. The case was arbitrated during the week of August 8, 2011 and proposed findings were filed on September 13, 2011. On January 4, 2012 the arbitrator entered an award denying Grains and Foods' claims and awarding Colorado Mills $ 4,816 for its breach of contract claim and $ 430 for accrued interest. The Company subsequently filed a motion to vacate the arbitration award on March 30, 2012 in Prowers County District Court. Colorado Mills filed a response on April 20, 2012. The Company filed a reply on April 27, 2012. The Prowers County District Court denied the Company's motion and entered judgment on the arbitration award on July 6, 2012 in the amount of $ 4,816. On July 13, 2012, the Company bonded the judgment in the amount of $ 6,875, or approximately 125% of the judgment amount, to stay execution of the judgment pending the Company's filing of an appeal to the Colorado Court of Appeals. On August 20, 2012, the Company appealed from the judgment to the Colorado Court of Appeals. The Colorado Court of Appeals affirmed the judgment, and the Company petitioned for re-hearing. While the petition for re-hearing was pending, the parties settled the matter on June 18, 2013 (see note 3). The settlement was on a full and final basis, it formally concluded all extant business dealings between the parties, and ended all open litigation matters. As a result, all disputes between the parties have now been resolved. (b) Other claims In addition, various claims and potential claims arising in the normal course of business are pending against the Company. It is the opinion of management that these claims or potential claims are without merit and the amount of potential liability, if any, to the Company is not determinable. Management believes the final determination of these claims or potential claims will not materially affect the financial position or results of the Company. (c) Environmental laws The Company believes that, with respect to both its operations and real property, it is in material compliance with current environmental laws. Based on known existing conditions and the Company's experience in complying with emerging environmental issues, the Company is of the view that future costs relating to environmental compliance will not have a material adverse effect on its consolidated financial position, but there can be no assurance that unforeseen changes in the laws or enforcement policies of relevant governmental bodies, the discovery of changed conditions on the Company's real property or in its operations, or changes in the use of such properties and any related site restoration requirements, will not result in the incurrence of significant costs. (d) Grain, sunflower and other commitments
As at December 28, 2013, the Company held grain for the benefit of others in the amount of $3,112 (December 29, 2012 – $6,879). The Company is liable for any deficiencies of grade or shortage of quantity that may arise in connection with such grain. As at December 28, 2013, the Company also has commitments to purchase $66,527 (December 29, 2012 – $70,295) of grains and sunflowers in the normal course of business. In addition, the Company has other supplier and purchase commitments in the amount of $17,466 as at December 28, 2013 (December 29, 2012 – $12,384).
(e) Letters of credit
The Company has outstanding letters of credit at December 28, 2013 totaling $3,944 (December 29, 2012 – $4,998).
(f) Real property lease commitments
The Company has entered into various leasing arrangements, which have fixed monthly rents that are adjusted annually each year for inflation.
Minimum commitments under operating leases, principally for processing facilities, warehouse and distribution facilities, and equipment for the next five fiscal years and thereafter are as follows:
In the years ended December 28, 2013, December 29, 2012 and December 31, 2011, net minimum rents, including contingent rents and sublease rental income, were $12,091, $10,704 and $10,211, respectively.
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