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Legal Proceedings
3 Months Ended
Jun. 30, 2011
Legal Proceedings [Abstract]  
LEGAL PROCEEDINGS
NOTE 9 — LEGAL PROCEEDINGS
Settlement of In re: Emerson Radio Shareholder Derivative Litigation. In April 2011, the Company paid the plaintiff’s attorney the amount due of $0.9 million in accordance with the award granted in March 2011 by the Delaware Court of Chancery. This fee award was recorded in the Company’s results of operation in the fourth fiscal quarter of 2011.
Kayne Litigation. On July 7, 2011, the Company was served with an amended complaint (the “Complaint”) filed in the United States District Court for the Central District of California alleging, among other things, that the Company, certain of its present and former directors and other entities or individuals now or previously associated with Grande, intentionally interfered with the ability of the plaintiffs to collect on a judgment (now approximately $47 million) they had against Grande by engaging in transactions (such as the dividend paid to all shareholders in March 2010) which transferred assets out of the United States. The Complaint also asserts claims under the civil RICO statute and for Alter Ego liability. By Order dated August 1, 2011, the Honorable John A. Kronstadt extended the Company’s time to answer or otherwise respond to the Complaint until September 9, 2011. In the Company’s opinion, based on an initial review, the claims appear to be devoid of merit. Emerson intends to defend the action vigorously.
Except for the litigation matters described above, the Company is not currently a party to any legal proceedings other than litigation matters, in most cases involving ordinary and routine claims incidental to our business. Management cannot estimate with certainty the Company’s ultimate legal and financial liability with respect to such pending litigation matters. However, management believes, based on our examination of such matters, that the Company’s ultimate liability will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.