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Contingencies | 12 Months Ended
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Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract] |
Contingencies | 13. Contingencies The following is a brief summary of litigation filed against the Company and its directors related to the Arrangement contemplated in the recently terminated Arrangement Agreement between the Company, on the one hand, and Prospect Capital Corporation and three of its subsidiaries, on the other hand: Jason Simpson v. Nicholas Financial, Inc., et al., Case No. 13-011726-CI (Circuit Court, Pinellas County, Florida), filed December 24, 2013; Gabriella Rago v. Nicholas Financial, Inc., et al., Case No. 8:13-cv-03261-VMC-TGW (U.S. District Court, Tampa, Florida), filed December 30, 2013; Matthew John Leonard v. Nicholas Financial, Inc., et al., Case No. 13-011811-CI (Circuit Court, Pinellas County, Florida), filed December 31, 2013; Michelangelo Lombardo v. Nicholas Financial, Inc., et al., Case No. 14-000095-CI (Circuit Court, Pinellas County, Florida), filed January 3, 2014; Edward Opton v. Stephen Bragin, et al., Case No. 14-000139-CI (Circuit Court, Pinellas County, Florida), filed January 6, 2014; Marvin Biver v. Nicholas Financial, Inc., et al., Case No. 8:14-cv-00250-VMC-TGW (U.S. District Court, Tampa, Florida), filed February 3, 2014; and Richard Abrons v. Nicholas Financial, Inc., et al., Case No. 8:14-cv-00583-VMC-TGW (U.S. District Court, Tampa, Florida), filed March 10, 2014. These seven substantially similar lawsuits were filed in connection with the Arrangement contemplated in the Arrangement Agreement between the Company, on the one hand, and Prospect Capital Corporation (“Prospect”) and three Prospect subsidiaries (collectively, the “Prospect Parties”), on the other hand. On April 30, 2014, the Biver and the Abrons lawsuits were consolidated (hereafter, the “Biver lawsuit”). On May 8, 2014, the Rago lawsuit was voluntarily dismissed, without prejudice. Each plaintiff to the five pending lawsuits purports to represent a class of all of the Company’s shareholders other than the defendants and any person or entity related to or affiliated with any defendant. Four of the lawsuits name as defendants the Company, the Company’s directors, and the Prospect Parties. The fifth lawsuit names those same parties as defendants, with the exception of two of the Prospect Parties. Each plaintiff alleges that the consideration to be paid for the Company’s Common Shares is inadequate and that certain terms of the Arrangement Agreement are contrary to the interests of the Company’s public shareholders. The plaintiffs in the Biver lawsuit make such allegations only in the context of asserting claims against the Company’s directors and the Prospect Parties under Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, predicated on alleged misrepresentations or omissions in the Registration Statement filed by Prospect on January 13, 2014. Each plaintiff, except for the plaintiffs in the Biver lawsuit, asserts a breach of fiduciary duty claim against the Company’s directors, and an aiding and abetting claim against the Company and/or certain of the Prospect Parties. Each plaintiff seeks declaratory relief, injunctive relief, other equitable relief and/or unspecified damages with respect to the proposed transaction. Each plaintiff, except for the plaintiffs in the Biver lawsuit, also seeks an award of attorneys’ fees. By agreement of the parties and orders dated May 12, 2014 and May 22, 2014, the four state Circuit Court actions have been stayed pending resolution of the Biver lawsuit. On May 30, 2014, the court in the Biver lawsuit denied motions filed by the Company, the Company’s directors and the Prospect Parties to dismiss the Biver lawsuit, or to abstain from exercising jurisdiction. However, the court granted those parties’ motions to stay the Biver lawsuit, and ordered that the Biver lawsuit is stayed for 120 days or pending resolution of the Arrangement approval proceedings in the Supreme Court of British Columbia, whichever occurs first. As set forth in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Strategic Alternatives,” the termination deadline for completion of the Arrangement pursuant to the Arrangement Agreement was June 12, 2014. On June 11, 2014, the Company’s Board of Directors determined to terminate the Arrangement Agreement effective immediately on the basis that the Arrangement could not be completed by the termination deadline. The Company and the Company’s directors do not believe that there is any merit to any of the pending actions, and they intend to continue to defend vigorously against such actions. Other than the proceedings discussed above, the Company currently is not a party to any pending legal proceedings other than ordinary routine litigation incidental to its business, none of which, if decided adversely to the Company, would, in the opinion of management, have a material adverse affect on the Company’s financial condition or results of operations.

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