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CONTINGENCIES
 9 Months Ended
Sep. 30, 2012
CONTINGENCIES  
CONTINGENCIES 
11. CONTINGENCIES
 
BPI
 
In order to secure Baker's  Pride's USDA loan,  BPI had a Phase I  environmental
site assessment done on the property where the Mt. Pleasant Street Bakery,  Inc.
resides (the  "Property") as required by BPI's  prospective  lender.  The study,
completed  on  October  7,  2011,  recommended  a Phase  II  environmental  site
assessment  on the  grounds  that there were  underground  storage  tanks on the
premises that did not have any record of being removed in addition to showing an
environmental  hazard on property  adjacent to the Mt.  Pleasant  Street  Bakery
caused  by  the  operations  of the  adjacent  property  owners.  The  Phase  II
environmental  site  assessment  was  completed  on  October  31,  2011  and was
submitted to the Iowa Department of Natural  Resources  ("IDNR") for its review.
IDNR  requested a Tier 2 site cleanup report be issued and completed in order to
better  understand  what  environmental  hazard exists on the Property.  At this
time, the potential  liability is estimated to be  approximately  $115,000.  The
remediation  work is 100% eligible for a refund from IDNR's  Innocent  Landowner
Fund. A liability has been recorded on BPI's balance sheet for this amount and a
corresponding  asset was also recorded to reflect the future  expense and refund
to be incurred by BPI.
 
TYREE
 
On December 5, 2011, Tyree's largest customer,  Getty Petroleum Marketing,  Inc.
("GPMI")  filed for  Chapter  11  bankruptcy  protection  in the  United  States
Bankruptcy  Court for the Southern  District of New York. As of that date, Tyree
has a pre-petition receivable of $1,515,401.27. This pre-petition receivable has
been fully  reserved for in the  Company's  allowance for doubtful  accounts.  A
Proof of Claim was filed with the Bankruptcy court on Tuesday, April 10, 2012.
 
On August 27, 2012, the United States Bankruptcy Court for the Southern District
of New York  confirmed  GPMI's  Chapter  11 plan of  liquidation  offered by its
unsecured creditors  committee,  overruling the remaining  objections.  The plan
provides for all of the debtors' property to be liquidated over time and for the
proceeds  to be  allocated  to  creditors.  Any  assets not  distributed  by the
effective  date  will be held  by a  liquidating  trust  and  administered  by a
liquidation trustee,  who will be responsible for liquidating assets,  resolving
disputed claims,  making  distributions,  pursuing reserved causes of action and
winding up GPMI's affairs. As an unsecured creditor,  Tyree may never collect or
may only collect a small percentage of the pre-petition amounts owed.
 
ESI
 
The Volkl license  agreement was terminated in September  2011 and  concurrently
the Strategic Alliance  Agreement with Samsung America CT, Inc.  ("Samsung") was
also terminated.  In the year of the termination,  the Volkl agreement  provides
for a minimum  guaranteed  royalty  payment of (Euro)  400,000;  which is (Euro)
200,000 in excess of the guaranteed  minimum royalty.  As of September 30, 2012,
ESI has paid (Euro)  100,000 of the guaranteed  minimum  royalty and recorded an
additional  (Euro)  100,000 as an accrued  liability.  Management  has initiated
counterclaims against the various parties seeking damages for, including but not
limited to infringement,  improper use of company assets and breach of fiduciary
duty.  As of  September  30,  2012,  the  disposal  period as defined  under the
Strategic Alliance  agreement has ended.  Management does not believe additional
liabilities  resulting from  terminating the strategic  alliance  agreement with
Samsung are likely.  Therefore, no additional amounts have been accrued in these
financial statements as of September 30, 2012.
 
As of this Report, the case continues to be litigated and Management will update
accordingly.
 
LEGAL PROCEEDINGS
 
AMINCOR
 
On July 6, 2012, SFR Holdings, Ltd., Eden Rock Finance Master Limited, Eden Rock
Asset Based Lending Master Ltd., Eden Rock  Unleveraged  Finance Master Limited,
SHK Asset Backed Finance  Limited,  Cannonball  Plus Fund Limited and Cannonball
Stability Fund, LP (collectively,  the "Plaintiffs")  commenced an action in the
Supreme Court of the State of New York County of New York against Amincor, Inc.,
Amincor Other Assets,  Inc.,  their  officers and  directors,  John R. Rice III,
Joseph F.  Ingrassia and Robert L. Olson and various other  entities  affiliated
with or  controlled  directly  or  indirectly  by John R. Rice III and Joseph F.
Ingrassia  (collectively  the  "Defendants").  Plaintiffs allege that Defendants
engaged in wrongful acts,  including  fraudulent  inducement,  fraud,  breach of
fiduciary duty, unjust enrichment, fraudulent conveyance and breach of contract.
Plaintiffs are seeking  compensatory  damages in an amount in excess of $150,000
to be determined at trial.  Defendants believe that this lawsuit has no merit or
basis and intend to vigorously defend it.
 
On  September  28,  2012,  Sean  Frost  ("Frost")  filed a  Complaint  to Compel
Arbitration  Regarding Breach of Employment Contract and Related Breach of Labor
Code Claims and For an Award of  Compensatory  Damages in the Superior  Court of
the State of California,  County of San Diego against Epic Sports  International
Inc., Amincor, Inc. and Joseph Ingrassia (collectively,  the "Defendants").  The
first  cause  of  action  is  a  petition  to  compel   arbitration  for  unpaid
compensation and benefits pursuant to Frost's employment  agreement.  The second
cause of action is for breach of contract for alleged  non-payment  of expenses,
vacation days and assumption of certain debts.  The third cause of action is for
violation of the  California  Labor Code for failure to pay wages due and owing.
Frost is seeking  among other  things,  damages,  attorneys'  fees and costs and
expenses.  Defendants believe that this lawsuit has no merit or basis and intend
to vigorously defend it.
 
TYREE
 
Tyree's  services  are  regulated  by federal,  state and local laws  enacted to
regulate   discharge  of  materials   into  the   environment,   remediation  of
contaminated  soil and groundwater or otherwise  protect the  environment.  This
ongoing regulation results in Tyree or Tyree's  predecessor  companies being put
at risk at becoming a party to legal  proceedings  involving  customers or other
interested parties. The issues involved in such proceedings  generally relate to
alleged  responsibility  arising  under  federal  or  state  laws  to  remediate
contamination  at  properties  owned or  operated  either by  current  or former
customers or by other parties who allege damages.  To limit its exposure to such
proceedings, Tyree purchases, for itself and Tyree's predecessor companies, site
pollution, pollution and professional liability insurance. Aggregate limits, per
occurrence  limits and deductibles for this policy are  $10,000,000,  $5,000,000
and $50,000, respectively.
 
Tyree and its  subsidiaries  are,  from time to time,  involved in ordinary  and
routine litigation.  Management  presently believes that the ultimate outcome of
these  proceedings  individually  or in the aggregate,  will not have a material
adverse  effect on the Company's  financial  position,  results of operations or
cash flows.  Nevertheless,  litigation is subject to inherent  uncertainties and
unfavorable  rulings could occur. An unfavorable  ruling could include  monetary
damages  and, in such event,  could result in a material  adverse  impact on the
Company's financial position, results of operations or cash flows for the period
in which the ruling occurs.
 
IMSC/OTHER ASSETS
 
Capstone  Business Credit,  LLC ("CBC"),  a related party, is the plaintiff in a
foreclosure action against Imperia Family Realty, LLC ("IFR"). IFR is related to
the  former  owners of  Masonry's  business.  In  November  2011 a  Judgment  of
Foreclosure  was granted by the court  ordering that the IMSC property in Pelham
Manor, New York (the "Property") be sold at public auction.
 
A former  principal of Imperia Bros.,  Inc. (a  predecessor  company of Masonry)
filed a notice of appeal dated  November 14, 2011 with the court  contesting the
Judgment of Foreclosure. The Company believes that the appeal will not be upheld
by the court since the same  appellate  court,  on February 16, 2010,  issued an
order that  granted CBC a motion of summary  judgment and  dismissed  all of the
former principal's affirmative defenses.
 
In  accordance  with the Judgment of  Foreclosure  a public  auction sale of the
Property was held on January 10, 2012. CBC, on behalf of Amincor, bid the amount
of their  lien and was the  successful  bidder.  CBC  then  assigned  its bid to
Amincor.
 
As of the report date,  title to the Property has not been  transferred due to a
title issue involving the notice of pendency ("Notice") that expired and was not
renewed at least 20 days prior to the  Judgment  of  Foreclosure  and Sale being
filed and entered. Since no title transfers or judgment/liens were filed against
the Property  after the  expiration  of the Notice,  the Company  believes it is
likely a conditional title will be issued and after recording the deed, IFR will
no longer have any ownership interest in the property.