2.4.0.8119 - Disclosure - REALIZATION OF ASSETStruefalsefalse1falsefalsefalseP01_01_2013To06_30_2013http://www.sec.gov/CIK0001260828duration2013-01-01T00:00:002013-06-30T00:00:001true1engy_GoingConcernDisclosureAbstractengy_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2engy_GoingConcernDisclosureTextBlockengy_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalseterseLabel1falsefalsefalse00 <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif "> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif"> <b>NOTE L — REALIZATION OF ASSETS</b></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 13.5pt; FONT: 10pt Times New Roman, Times, Serif"> The unaudited consolidated balance sheets of Central have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of Central as a going concern. Central had a loss from operations for the year ended December 31, 2012 and the six months ended June 30, 2013. During March 2013, the RZB Loan ($<font style=" FONT-SIZE: 10pt">1,970,000</font> at December 31, 2012) was repaid with proceeds from the $<font style=" FONT-SIZE: 10pt">2,500,000</font> of total advances received by Regional under the Hopewell Loan.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 13.5pt; FONT: 10pt Times New Roman, Times, Serif"> Central’s deficit in working capital, excluding the current amounts due under the Hopewell Loan and income taxes, penalties and interest, totaled $<font style=" FONT-SIZE: 10pt">2,160,000</font> at June 30, 2013. Regional’s unpaid income and sales taxes totaled approximately $<font style=" FONT-SIZE: 10pt">167,000</font> at June 30, 2013, including penalties and interest and excluding approximately $<font style=" FONT-SIZE: 10pt">82,000</font> of adjustments yet to be recognized by the related tax authorities. In addition, the Partnership is liable for tax penalties to the CAFTB of $<font style=" FONT-SIZE: 10pt">316,000</font>. RVOP is also responsible for contingencies associated with the TransMontaigne dispute (see Note G – Commitments and Contingencies – TransMontaigne Dispute). The Partnership and the General Partner have limited cash resources and are dependent on Regional to fund ongoing corporate expenses.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 13.5pt; FONT: 10pt Times New Roman, Times, Serif"> Substantially all of Central’s assets are pledged or committed to be pledged as collateral for the Hopewell Loan, and therefore, Central is unable to obtain additional financing collateralized by those assets. Central believes that Regional will have sufficient working capital for its ongoing operations assuming (a) the Storage Tank is placed back into service as currently projected, (b) the expected increase in revenues from recent contracts entered into by Regional are realized, (c) the expiring contracts during 2013 are renewed without disruption in service and at terms no less favorable than the existing contract terms, (d) that Regional’s obligations to creditors are not accelerated, (e) that Regional satisfactorily resolves the Litigation with SGR and (f) that Regional’s costs to operate do not increase. Until such time as the aforementioned conditions are achieved, Regional’s working capital may not be adequate to meet current cash requirements and Regional is unable to fund any amount of working capital to Central. Regional is currently seeking to obtain additional funding through an increase in the amounts advanced under the Hopewell Loan or from a funding transaction completed by the Partnership and/or the General Partner.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 13.5pt; FONT: 10pt Times New Roman, Times, Serif"> Central’s ability to raise capital is hindered by the existing pledge and therefore the ability to obtain additional capital over the cash generated from operations to make the Hopewell Note payments, for payment of taxes, penalties and interest, for payment of the contingent liabilities, for expansion, repair of the Storage Tank, capital improvements to existing assets, for working capital or otherwise is limited. In addition, the Partnership has obligations under existing registrations rights agreements. These rights may be a deterrent to any future equity financings. Management continues to seek acquisition opportunities for the Partnership to expand its assets and generate additional cash from operations. As described above, there is no assurance that Regional will have sufficient working capital to cover its ongoing cash requirements or any of the ongoing overhead expenses of the Partnership for the period of time that management believes is necessary to complete an acquisition that will provide additional working capital for the Partnership. If the Partnership does not have sufficient cash reserves, its ability to pursue additional acquisition transactions will be adversely impacted. Furthermore, despite significant effort, the Partnership has thus far been unsuccessful in completing an acquisition transaction. There can be no assurance that the Partnership will be able to complete an accretive acquisition or otherwise find additional sources of working capital. If an acquisition transaction cannot be completed or if additional funds cannot be raised and cash flow is inadequate, the Partnership and/or Regional would be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 13.5pt; FONT: 10pt Times New Roman, Times, Serif"> In view of the matters described in the preceding paragraphs, recoverability of the recorded asset amounts shown in the accompanying consolidated balance sheet is dependent upon the ability of (1) Regional to achieve operating results as currently projected, (2) Regional to pay its creditors as required, including the Hopewell Loan and the IRS and the VDOT amounts under arrangements satisfactory to Regional (3) the Partnership resolving favorably the exposure for late tax filing penalties to the CAFTB, (4) satisfactory resolution to the Litigation with SGR, (5) RVOP satisfactorily resolving the TransMontaigne dispute, (6) Regional satisfactorily completing the repairs associated with the Storage Tank, (7) the Partnership continuing to receive waiver of salaries and expenses by the Partnership’s executive officers until sufficient working capital is received, (8) Regional’s ability to obtain additional advances under the Hopewell Loan and (9) the Partnership’s ability to receive additional distributions from Regional or future advances from the General Partner in amounts necessary to fund overhead until an acquisition transaction is completed by the Partnership.</div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt"><font size="2"> </font></div> <div style="clear:both; FONT-FAMILY:Times New Roman;FONT-SIZE: 10pt;TEXT-ALIGN: justify; MARGIN: 0pt 0px 0pt 13.5pt; FONT: 10pt Times New Roman, Times, Serif"> The unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should Central be unable to obtain adequate funding to maintain operations and to continue in existence.</div> </div> falsefalsefalsenonnum:textBlockItemTypenaGoing Concern Disclosure [Text Block]No definition available.false0falseREALIZATION OF ASSETSUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.pennoctane.com/role/RealizationOfAssets12