Harbinger Group Inc.
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SEC Filings

10-K
HRG GROUP, INC. filed this Form 10-K on 11/23/2016
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The following were excluded from the calculation of “Diluted net loss per common share attributable to controlling interest” because the as-converted effect of the unvested restricted stock and stock units, stock options and warrants would have been anti-dilutive (share amounts in thousands):
 
Fiscal
 
2016
 
2015
 
2014
Preferred stock

 

 
37,990

Unvested restricted stock and restricted stock units

 
2,667

 
2,580

Stock options

 
1,334

 
1,330

Anti-dilutive warrants
1,200

 
1,800

 
3,000


(22) Commitments and Contingencies
Legal and Environmental Matters
The Company has aggregate accruals for its legal, environmental and regulatory matters of approximately $8.2 at September 30, 2016, of which $3.8 related to accruals of business held for sale. These accruals relate primarily to the matters described below. In addition, the Company and its subsidiaries are involved in other litigation and claims arising out of their prior businesses and arising in the ordinary course out of their current businesses, which include, among other things, indemnification and other claims and litigations involving HRG’s and its subsidiaries’ business practices, transactions, workers compensation matters, environmental matters, and personal injury claims. However, based on currently available information, including legal defenses available to the Company, and given the aforementioned accruals and related insurance coverage, the Company does not believe that the outcome of these legal, environmental and regulatory matters will have a material effect on its financial position, results of operations or cash flows.
HRG
HRG was named as a nominal defendant, and members of its Board were named as defendants in a purported class and derivative action filed in March 2014 by Haverhill Retirement System (the “Haverhill Plaintiff”) in the Delaware Court of Chancery (the “Court”). Harbinger Capital Partners LLC and certain of its affiliated funds (“HCP”) and Leucadia National Corporation (“Leucadia”), each a stockholder of HRG, were also named as defendants in the complaint. The complaint alleged, among other things, that the defendants breached their fiduciary duties in connection with transactions involving Leucadia. On January 7, 2016, the Court approved a stipulation under which the Haverhill Plaintiff agreed to dismiss the action. HRG has paid the Haverhill Plaintiff’s counsel $0.2 in attorney’s fees and expenses and the Haverhill Plaintiff dismissed its action against the defendants.
HRG was named as a nominal defendant, and members of its Board were named as defendants, in a derivative action filed in December 2010 by Alan R. Kahn (the “Kahn Plaintiff”) in the Court. HCP was also named as a defendant. The Kahn Plaintiff alleged that HRG’s acquisition of HCP’s shares of Spectrum Brands in exchange for shares of common stock of HRG from HRG was financially unfair to HRG and its public stockholders, and sought unspecified damages and the rescission of the transaction. On November 24, 2015, the parties filed a Stipulation of Settlement with the Court (“Kahn Settlement”). The Kahn Settlement was approved by the court on February 4, 2016, and the Kahn Plaintiff’ action was dismissed. Pursuant to the terms of the Kahn Settlement, HCP and the Company’s insurer paid a total of $3.8 into a settlement fund that were, net of distribution and notice costs and the fee and expense award to plaintiff's counsel, distributed to stockholders of HRG other than stockholders affiliated with HCP, the members of HRG’s Board at the time of the challenged transaction and certain other persons. HRG will not contribute any payment to the Kahn Settlement fund.
Also see discussion below of Ludwick Litigation involving HRG, Front Street and FGL.
Spectrum Brands
Spectrum Brands is a defendant in various litigation matters generally arising out of the ordinary course of business. Spectrum Brands does not believe that any of the matters or proceedings presently pending will have a material adverse effect on its results of operations, financial condition, liquidity or cash flows.
At September 30, 2016 and 2015, Spectrum Brands has provided for the estimated costs of $4.4, respectively, associated with environmental remediation activities at some of its current and former manufacturing sites. Spectrum Brands believes that any additional liability in excess of the amounts provided that may result from resolution of these matters, will not have a material adverse effect on the financial condition, results of operations or cash flows of Spectrum Brands. Spectrum Brands is subject to various federal, state and local environmental laws and regulations. Spectrum Brands believes it is in substantial compliance with all such environmental laws that are applicable to its operations.

F-71

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