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Legal Matters
9 Months Ended
Sep. 30, 2011
Legal Matters [Abstract] 
LEGAL MATTERS
NOTE 11 — LEGAL MATTERS
We are named from time to time in legal proceedings related to our activities prior to our predecessor’s bankruptcy in 1988. However, we believe that we were discharged from liability for all such claims in the bankruptcy and believe the likelihood of a material loss relating to any such legal proceeding is remote.
We are also involved in litigation or proceedings that have arisen in our ordinary business activities. We insure against these risks to the extent deemed prudent by our management and to the extent insurance is available, but no assurance can be given that the nature and amount of that insurance will be sufficient to fully indemnify us against liabilities arising out of pending and future legal proceedings. Many of these insurance policies contain deductibles or self-insured retentions in amounts we deem prudent and for which we are responsible for payment. If there is a claim, dispute or pending litigation in which we believe a negative outcome is probable and a loss by the Company can be reasonably estimated, we record a liability for the expected loss but at this time any such expected loss are immaterial to our financial condition and results of operations. In addition we have certain claims, disputes and pending litigation in which we do not believe a negative outcome is probable or for which the loss cannot be reasonably estimated.
Shortly following the announcement of the Merger Agreement with Seawell (now Archer) in August 2010, multiple stockholder class-action lawsuits were filed in Delaware and in Texas against various combinations of us, members of our board of directors and the Archer parties to the Merger Agreement. These lawsuits had challenged the Merger and generally alleged that our directors had breached their fiduciary duties owed to our public stockholders by approving the Merger and failing to take steps to maximize our value to our public stockholders. In February 2011, the Delaware court denied plaintiffs’ request for an injunction and the Merger closed on February 23, 2011. After the Merger, the consolidated Delaware lawsuit was dismissed as moot and several of the Texas lawsuits have also been dismissed. Two Texas lawsuits remain on file, but both are entirely inactive and we believe both will be dismissed in due course.
The case of Nexen Petroleum U.S.A., Inc. et al v. Allis-Chalmers Rental Services, LLC, Cameron, Hydril and Tri-City Pipe & Machine involved a blow out on a well operated by Nexen in Vermilion Parish, Louisiana and was settled in September 2011. The settlement was funded by our insurers and we were responsible for our standard insurance deductible amount. We have no further liability under these claims.