Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

On March 29, 2012, GreenHunter Water entered into a five year commercial lease agreement for an existing truck and barge transloading and water storage facility located in Washington County, Ohio. The facility is located on approximately 10 acres of land and contains 70,000 barrels (BBL) of functional bulk liquids storage tank capacity, a barge transloading station, a covered loading station with multiple truck servicing bays and office space. The lease commitment is for five years with monthly payments of $8 thousand for the first year, $10 thousand for the second year and $12 thousand for years three through five of the lease. Additionally, we are required to pay an additional fee of $0.04 per barrel for all wastewater delivered for and stored on the leased premises.

ABB, Inc. vs. GreenHunter Energy, Inc. In the Superior Court of California, County of Imperial, Case No. ECU07002.

ABB, Inc. was a subcontractor to Crown Engineering for certain construction work performed at our Mesquite Lake plant in Imperial County, California several years ago. GreenHunter Energy, Inc. only had a construction contract directly with Crown Engineering and not with any of its subcontractors. On or about January 18, 2010, GreenHunter entered into a settlement agreement with Crown Engineering settling any disputes between the parties regarding the work done at our Mesquite Lake plant. Green Hunter performed all of its obligations under the settlement agreement. Plaintiff is attempting to enforce payment of its claim, approximately $327,555 by asserting it is a third party beneficiary under the Company’s settlement agreement with Crown Engineering.

GreenHunter will challenge the complaint by way of a demurrer, challenging the Plaintiff’s right to claim it is an intended beneficiary of the settlement agreement. We believe the plaintiff’s claims are wholly without merit and accordingly have not recorded a liability for this matter.

Heckmann Water Resources, Plaintiff v. Hunter Disposal LLC and GreenHunter Energy, Inc., Defendants, In the Court of Common Pleas, Washington County, Ohio, Case No. 120T233.

Heckmann Water Resources, the Plaintiff, alleges a breach of contract against Hunter Disposal, LLC, for failure to pay for certain transportation services on behalf of Hunter Disposal. The Plaintiff alleges the Company made representations to Plaintiff that the Company would make any payments on Hunter Disposal’s behalf. The complaint alleges that Hunter Disposal and the Company currently owe the Plaintiff approximately $1.5 million for services rendered and not paid for, and is seeking damages for all amounts owed to the Plaintiff. The Company has hired legal counsel and is currently preparing its answer to this lawsuit, including countersuing the Plaintiff for tortuous interference with an existing contract and defamation. As of July 25, 2012, Hunter Disposal partially has paid the amounts owed to Plaintiff, and has reduced the amount outstanding to the Plaintiff to approximately $587 thousand. All amounts owed to Plaintiff have already been recorded in our financial statements and have been reported in all of our periodic reports, so no additional financial reserves are required.