Discontinued Operations

3 Months Ended

Mar. 31, 2012

Discontinued Operations [Abstract]

Discontinued Operations

2. Discontinued Operations

On September 2, 2010, the Company completed the sale of its LC business to BP Biofuels North America LLC ("BP") pursuant to an asset purchase agreement. The transaction resulted in net cash proceeds to the Company of $96.0 million (including $5.0 million of the purchase price placed in escrow). Pursuant to the terms of the asset purchase agreement, $5.0 million of the purchase price was placed in escrow and is subject to the terms of an escrow agreement, to cover the Company's indemnification obligations for potential liabilities and breaches of representations and warranties made by the Company in the asset purchase agreement, most of which survived for a period of 18 months following the closing, or March 2, 2012. With respect to some claims, the Company is not required to make any indemnification payments until aggregate claims exceed $2.0 million, and then only with respect to the amount by which claims exceed that amount, and the Company's maximum indemnification liability is generally capped at $10.0 million with respect to most representations. However, some indemnifications claims are not subject to the deductible amount or the cap on aggregate liability. BP has made a claim for indemnification by the Company pursuant to the escrow agreement in connection with a claim made by University of Florida Research Foundation, Inc. ("UFRF'), against BP relating to a license granted by UFRF to Verenium Biofuels Corporation (now known as BP Biofuels Advanced Technology, Inc.), which was acquired by BP in the 2010 transaction. BP has directed the escrow agent not to disburse the $5 million in escrow pending resolution of the indemnification claim. The Company has directed the escrow agent to distribute $2.5 million of the amount held in escrow, which amount was to have been previously disbursed solely at the direction of the Company. The escrow agent disbursed the $2.5 million during the quarter and the remaining $2.5 million will remain in escrow pending resolution of the UFRF claim against BP. The Company believes that the UFRF claim against BP, and the BP claim against the Company for indemnity pertaining to the UFRF claim, are without merit. The remaining $2.5 million in escrow is reflected as restricted cash within current assets on the Company's consolidated balance sheets as of March 31, 2012.

The results of operations from discontinued operations for the three months ended March 31, 2012 and 2011 are set forth below (in thousands):

	Three Months Ended March 31,
	2012			2011
Operating expenses (income):
Research and development		0			(6	)
Selling, general and administrative		15			(55	)
Total operating expenses (income)		15			(61	)
Net (loss) income from discontinued operations	$	(15	)	$	61