|
Commitments and Contingencies
|
9 Months Ended |
|---|---|
|
Oct. 27, 2012
|
|
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Commitments and Contingencies The Company currently holds a 39.49% investment interest in a joint venture in India. In July 2012, the shareholders representing the remaining interests in the joint venture purported to exercise put option rights they hold under an option agreement, pursuant to which they may require the Company to purchase their shares at fair market value. Prior to the shareholders' purported exercise of the put options, the Company and the other shareholders engaged two valuation firms in India to provide assistance with the valuation of the shares. The firms valued the joint venture at approximately $89.0 million, which would result in payment by the Company of approximately $54.0 million for the shares. The Company believes that the valuations were not conducted in accordance with fair market valuation principles as required by the shareholder documentation and contain other significant methodological flaws. The Company therefore believes that the options were improperly exercised by the shareholders. The Company is disputing the valuations pursuant to the terms of the relevant shareholder documentation, which provides for a period of good faith negotiation followed, to the extent unsuccessful, by arbitration. The Company is currently pursuing efforts in good faith to resolve its dispute with the shareholders. Should this not be possible, the Company intends to vigorously pursue its dispute of the valuations and believes it has meritorious arguments in challenging the exercise of the options. However, if the Company is required to purchase the shares based on valuations in excess of what it believes would be the fair value of the business in an arms-length transaction between market participants then, upon acquisition of the shares, the Company would likely recognize a loss, which could be material. Staples had a contractual dispute with Corely S.C./Lyreco S.A.S. as a result of acquiring Corporate Express. Prior to Staples' acquisition of Corporate Express, Corporate Express and Corely/Lyreco entered into an agreement that required Corporate Express to pay €30 million to Corely/Lyreco in the event that the merger between Corporate Express and Corely/Lyreco was not completed as a result of Staples' acquisition of Corporate Express. Upon Staples' acquisition of Corporate Express, Corporate Express paid the €30 million to Corely/Lyreco. Corely/Lyreco had been seeking through arbitration to have Staples gross up this payment to cover the corporate income taxes it incurred as a result of the payment. On February 29, 2012, after the Company had filed its Annual Report on Form 10-K for the year ended January 28, 2012 with the Securities and Exchange Commission, Staples was notified that the arbitration tribunal had issued its final ruling ordering Staples to pay Corely/Lyreco a portion of the €12.0 million claim that was previously disclosed in the Annual Report. Staples paid the amount on March 2, 2012. In addition, from time to time, the Company is involved in litigation arising from the operation of its business that is considered routine and incidental to its business. The Company does not expect the results of any of these actions to have a material adverse effect on its business, results of operations or financial condition. |