Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

11.  Commitments and Contingencies

On October 8, 2015, a lawsuit was filed against the Company and Ambassador Programs, Inc. in the State of Missouri, docketed as People to People International v. Ambassadors Group, Inc. and Ambassador Programs, Inc., Case No. 1516-CV21344.  The lawsuit alleges, among other things, that defendants breached Ambassador Programs, Inc.’s student and adult travel and exchange agreements with People to People International when the Company declared in its press release dated July 13, 2015 that it will cease operations and close its student and adult travel business by the end of 2015, and that Ambassadors Programs, Inc. further breached such agreements by allegedly withholding payment of license fees otherwise earned for the 2015 travel season.  The lawsuit seeks, among other things, unspecified lost future profits through June 2020 and punitive damages for intentionally withholding the 2015 license fees, in addition to payment of plaintiff’s attorney fees and costs.  The Company believes that the lawsuit is without merit and intends to defend itself vigorously. There can be no assurance, however, with regard to the outcome.

We are not a party to any other material pending legal proceedings, other than litigation incidental to the wind down of our business, the outcome of which we believe will not have a material adverse effect on our financial condition.

We are subject to the possibility of various loss contingencies, including claims, suits and complaints, arising in connection with the wind down of our business. We consider the likelihood of loss or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted and whether new accruals are required.

Under our Bylaws, our directors and officers have certain rights to indemnification by us against certain liabilities that may arise by reason of their status or service as directors or officers. We maintain director and officer insurance, which covers certain liabilities arising from our obligation to indemnify our directors and officers and former directors in certain circumstances. No material indemnification liabilities were accrued at September 30, 2015.