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Legal Proceedings and Contingencies
9 Months Ended
May 31, 2013
Commitments And Contingencies Disclosure [Abstract]  
Legal Proceedings and Contingencies

13—LEGAL PROCEEDINGS AND CONTINGENCIES

On April 16, 2013, the Company received $3.4 million in full settlement of certain claims the Company had made against a contractor and its insurer that arose from engineering design work performed in connection with the construction of the Company’s ethanol plant completed in 2008. The Company had alleged breach of contract and negligence by the contractor, and sought recovery of its costs and damages from the contractor and its insurer due to errors and delays in the performance of the work. The settlement amount, net of contingent legal fees, expert fees and other litigation expenses incurred in the matter, of approximately $2.1 million, was reflected as a reduction of the cost of the ethanol plant. Approximately $0.3 million was recorded as a reduction of operating expenses related to the recovery of legal and other costs.

The Company is involved from time to time in various claims and litigation arising in the normal course of business. The Company expenses legal costs as incurred. In the judgment of management, which relies in part on information obtained from the Company’s outside legal counsel, the ultimate resolution of these other matters will not materially affect the consolidated financial position, results of operations, or liquidity of the Company, although the outcomes could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

The Company regularly evaluates the status of claims and any related legal proceedings in which it is involved in order to assess whether a loss is probable, whether there is a reasonable possibility that a loss may have been incurred and to determine if accruals are appropriate. Management is unable to provide additional information regarding any possible losses arising from such claims because (i) the Company currently believes that the claims are not adequately supported, and (ii) there are significant factual and legal issues to be resolved.