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LITIGATION | 12 Months Ended
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Dec. 31, 2013
LITIGATION [Abstract] |
LITIGATION | NOTE 13: LITIGATION Employment Litigation Natalie Clark v. Mannatech, Incorporated, Case No. DC-13-05038, 192nd Judicial District Court, Dallas County, Texas On May 10, 2013, the Company was served notice of a lawsuit filed by Ms. Natalie Clark, a former executive of the Company, in the 192nd Judicial District Court, Dallas County, Texas (the “Court”) alleging discrimination and harassment based on gender. Ms. Clark alleges that she was stripped of her duties and wrongfully discharged as part of an alleged “purge of females in key positions” within the Company. Ms. Clark is seeking damages in excess of $1,000,000. The Company has retained counsel and filed its answer denying Ms. Clark’s allegations. This case is set for jury trial on June 2, 2014. Additionally, the Court issued a standard mediation order; mediation must be conducted no later than May 2, 2014. The parties are engaged in the discovery process. Ms. Clark’s deposition was taken on January 23, 2014. Opposing counsel will be scheduling the depositions of Company employees and other fact witnesses. It is not possible at this time to predict whether the Company will incur any liability, or to estimate the ranges of damages, if any, which may be incurred in connection with this matter. However, the Company believes it has a valid defense and will vigorously defend this claim. This matter will remain open until it is resolved. Administrative Proceedings On July 11, 2013, the Company was issued an assessment notice from the Busan Custom Office in Korea resulting from an audit covering fiscal years 2008 through 2012. Other expense includes $1.0 million for this assessment, $0.19 million of which was accrued as of December 31, 2013 and paid in January 2014. The examination of our 2005-2009 tax years by the IRS for U.S. federal tax purposes was settled during the second quarter of 2013. On May 13, 2013, the IRS and the Company concluded the audit and agreed to a net tax deficiency of $0.8 million and the payment of interest accrued through June 30, 2013 of $0.2 million, without any penalties. In connection with the settlement of the audit, the Company reclassified amounts owed to the IRS and previously recorded as uncertain income tax positions as taxes payable, resulting in a $1.0 million tax benefit during the three months ended June 30, 2013. There are other ongoing income tax audits in various international jurisdictions that are not expected to have a material effect on our financial statements. There are other ongoing audits in various international jurisdictions that the Company does not expect will have a material effect on our financial statements. Litigation in General The Company has incurred several claims in the normal course of business. The Company believes such claims can be resolved without any material adverse effect on its consolidated financial position, results of operations, or cash flows. The Company maintains certain liability insurance; however, certain costs of defending lawsuits are not covered by or only partially covered by its insurance policies, including claims that are below insurance deductibles. Additionally, insurance carriers could refuse to cover certain claims, in whole or in part. The Company accrues costs to defend itself from litigation as they are incurred or as they become determinable. The outcome of litigation is uncertain, and despite management’s views of the merits of any litigation, or the reasonableness of the Company’s estimates and reserves, the Company’s financial statements could nonetheless be materially affected by an adverse judgment. The Company believes it has adequately reserved for the contingencies arising from current legal matters where an outcome was deemed to be probable, and the loss amount could be reasonably estimated.

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