2.4.0.8060500 - Disclosure - Commitments and Contingenciestruefalsefalse1falsefalsefalsec20130101to20130630http://www.sec.gov/CIK0001365101duration2013-01-01T00:00:002013-06-30T00:00:001true1us-gaap_CommitmentsAndContingenciesDisclosureAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_CommitmentsAndContingenciesDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><div style="text-align: left;"><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; font-weight: bold; align: right;">5.</td><td style="text-align: left; width: auto; font-family: ''Times New Roman'', Times, serif; font-size: 10pt; vertical-align: top; font-weight: bold;">Commitments and Contingencies</td></tr></table></div><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Class Action Suit</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">On December 2, 2011, Primo, certain members of our board of directors, certain members of management, and certain shareholders and company advisors were named as defendants in a purported class-action lawsuit filed in the United States District Court for the Middle District of North Carolina.  The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933.  The complaint asserts claims on behalf of a class of persons who acquired our common stock in or traceable to our initial public offering and our secondary offering as well as purchasers of our common stock between November 4, 2010 and August 10, 2011.  The complaint alleges that defendants violated the federal securities laws by, among other things, making misrepresentations about our projected financial results and business operations in order to artificially inflate the price of our stock.  The complaint requests unspecified damages and costs.  We do not believe it has merit and plan to vigorously contest and defend against it.  We have filed a motion to dismiss all claims.  All briefing and oral argument on the motion to dismiss have been completed, and the motion has been submitted to the judge.  We are insured for potential losses subject to limits, which we do not expect to reach.  We are required to indemnify each of the named defendants that are party to the lawsuit against losses and expenses they incur in connection with the litigation.</div><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Electrotemp</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">On October 14, 2011, Primo, through a wholly-owned subsidiary, filed a complaint against Electrotemp Technologies China, Inc. ("Electrotemp") in Mecklenburg County (North Carolina) Superior Court, alleging breach of contract, quantum meruit/unjust enrichment, and violation of the North Carolina Products Liability Act/breach of implied warranty. Our claims arise out of Electrotemp's failure to credit us for defective water coolers manufactured by Electrotemp and sold by us which were returned by unsatisfied customers.  We are seeking damages of $3,100, which consist primarily of claims for defective water dispensers manufactured by Electrotemp. Electrotemp removed the action to the United States District Court for the Western District of North Carolina based on diversity of citizenship.  The parties filed a Joint Motion to stay litigation so that they could proceed with mediation and arbitration pursuant to the dispute resolution clause in their agreement.  On May 1, 2012, the Court ordered that the litigation would be stayed once the parties formally enter into arbitration.  The parties were unable to resolve their dispute through mediation, so Primo filed its Notice of Arbitration with ADR Chambers International in Toronto, Ontario, Canada in accordance with the dispute resolution clause in the parties' agreement.  Electrotemp has also asserted claims in the arbitration, including $2,800 for "unpaid goods," $3,000 for alleged loss of sales, and $5,000 for engaging an Electrotemp competitor to sell product in the U.S., in alleged violation of the parties' contract. The arbitration is scheduled to begin October 28, 2013. Now that the parties have formally agreed to enter into arbitration, the litigation has been stayed.</div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;"> </div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Florida Concentrates Suit</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">On October 16, 2012, Primo was served with the Summons and Complaint in a suit filed in the Florida state courts on September 26, 2012.  Plaintiffs in the suit are Florida Concentrates International, LLC (a Florida limited liability company), Florida Sparkling DS, LLC (a Florida limited liability company), and Didier Hardy (a Florida resident and apparently the principal of the LLC plaintiffs).  Also named as defendants are Susan and Scott Ballantyne (alleged to be Florida residents) and SDS-IC.  The suit was filed in the Circuit Court for the Twentieth Judicial District (Collier County, Florida).  Plaintiffs' allegations include breach of contract, misappropriation of trade secrets and certain additional claims and plaintiffs seek monetary damages.  We do not believe that the suit has any merit whatsoever, and plan to vigorously contest and defend against it.  We have filed a motion to dismiss all claims, which was granted in part and denied in part by the court.</div><div><br /></div><div style="text-align: left; font-style: italic; font-family: ''Times New Roman'', Times, serif; margin-left: 18pt; font-size: 10pt;">Omnifrio Single-Serve Beverage Business</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Deferred purchase price payments totaling $2,000 were included within liabilities of disposal group held for sale, net of current portion and current liabilities of disposal group held for sale on the condensed consolidated balance sheets as of June 30, 2013 and December 31, 2012, respectively. These payments were related to the April 11, 2011 acquisition of certain intellectual property and other assets from the seller, Omnifrio Beverage Company LLC ("Omnifrio").  On July 19, 2013, we entered into a conditional settlement and release agreement with Omnifrio and certain other parties pursuant to which we agreed to, among other things, use commercially reasonable efforts to sell the assets purchased from Omnifrio in April 2011 and to provide Omnifrio certain amounts of the proceeds of any such sale in exchange for Omnifrio agreeing to release us from any claims related to the milestone payments included in our original purchase agreement with Omnifrio and, upon the sale of such assets, to release us from any claims related to the deferred purchase price payments included in such agreement.</div><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Sales Tax</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">We routinely purchase equipment for use in operations from various vendors.  These purchases are subject to sales tax depending on the equipment type and local sales tax regulations; however, we believe certain vendors have not assessed the appropriate sales tax.  For purchases that are subject to sales tax in which we believe the vendor did not assess the appropriate amount, we accrue an estimate of the sales tax liability we ultimately expect to pay.</div><div><br /></div><div style="text-align: left; font-style: italic; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">Other Contingencies</div><div><br /></div><div style="text-align: left; text-indent: 18pt; font-family: ''Times New Roman'', Times, serif; font-size: 10pt;">From time to time, we are involved in various claims and legal actions that arise in the normal course of business. Management believes that the outcome of such legal actions will not have a significant adverse effect on our financial position, results of operations or cash flows.</div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for commitments and contingencies.Reference 1: http://www.xbrl.org/2003/role/presentationRef
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