RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2014

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

During the six month period ended June 30, 2014, we were involved in various transactions with related parties, including an affiliated company, K&R, LLC ("K&R"), which is wholly-owned by Kletter Holding LLC, which is wholly-owned by a trust for which Orson Oliver, our interim CEO and Chairman of the Board, is trustee.

A summary of the K&R transactions, in thousands, as of June 30, 2014 is as follows:

	2014
Balance sheet accounts:
Accounts receivable	$	32.2
Deposits (included in current liabilities)	$	500.0
Deposits (included in other long-term assets)	$	42.1
Accrued rent (property)	$	329.2
Accrued leases (equipment)	$	52.5
Income statement activity:
Rent expense (property)	$	323.0
Lease expense (equipment)	$	63.0

See Note 5 - Lease Commitments for additional information relating to the rent and lease agreements with K&R.

On September 13, 2013, K&R made a $500.0 thousand refundable, non-interest bearing deposit with us related to K&R's potential purchase of a piece of our real property located at 1565 East 4th Street in Seymour, Indiana. We continue to negotiate the terms of the potential transaction. We were permitted and have used the deposited funds for general corporate purposes. If we are unable to agree to the terms of a transaction, we are obligated to refund the deposit to K&R. For the period ended June 30, 2014 this deposit is recorded as a current liability entitled "Deposit from related party" for $500.0 thousand.

Other related party transactions are as follows:

Management Services payments to Algar, Inc.:

On December 2, 2013, we entered into a Management Services Agreement (the "Management Agreement") with Algar, Inc. ("Algar").  Under the Management Agreement, Algar provides us with day-to-day senior executive level services. Algar will also provide business, financial, and organizational strategy and consulting services, as our board of directors may reasonably request from time to time.

On December 2, 2013, in connection with the Management Agreement, our board of directors appointed Sean Garber as President. Under the Management Agreement, we will reimburse Algar for the portion of Mr. Garber’s salary that is attributable to Algar’s services under the Management Agreement in an amount not to exceed $20.8 thousand per month, or $250.0 thousand per year plus other expenses. During the six month period ended June 30, 2014, we expensed management fees to Algar of $190.1 thousand.

During the six month period ended June 30, 2014, we accrued a bonus payable to Algar in the amount of $340.0 thousand per the Management Agreement. During the six month period ended June 30, 2014, we sold scrap material in the amount of $329.0 thousand to Algar. As of June 30, 2014, we had $214.4 thousand in accounts payable to Algar and $27.0 thousand in accounts receivable from Algar.

Scrap material sales to Metal X, LLC:

During the six month period ended June 30, 2014, we sold scrap material in the amount of $889.7 thousand to MetalX, LLC. As of June 30, 2014, we had $119.2 thousand in accounts receivable from MetalX, LLC. For additional information regarding MetalX, LLC, see Note 11 - "Financing and Related Matters" to the Condensed Consolidated Financial Statements.