Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company has employment retention or change in control agreements with certain executive officers that provide, in defined circumstances, for the payment of severance payments of 12 months base compensation, among other things.

On September 30, 2013, the Company completed the sale of certain assets comprising its Portamedic service line to Piston. The Asset Purchase Agreement also provides, among other things, that (1) if Piston incurs any losses relating to any governmental inquiry received by Piston or the Company within 18 months of the closing date, the Company will pay up to $100,000 for one half of such losses, (2) if Piston elects to pursue, prosecute, defend, settle, compromise, appeal or take other actions with respect to certain matters relating to matters disclosed by the Company to Piston pre-closing (“Pre-Closing Matters”), the Company will cooperate with Piston (including joining in any legal proceeding related to such matters) and pay up to $100,000 for one half of all losses in connection with such matters, and (3) Piston or its designees will make required payments for rents, charges, maintenance fees and all utility services to the Company associated with Piston’s or such designee’s occupancy of each premises that is the subject of a Company lease to be assumed by Piston or its designees, but the assignment of which was not completed by closing, until such time as the lease is duly assigned (or otherwise superseded by an agreement between Piston and the applicable landlord). The Company has agreed to bear all liability relating to the occupancy arrangements until they are transferred to Piston. With respect to Pre-Closing Matters, the Company also agreed that in the event Piston elects to pursue a claim relating to a Pre-Closing Matter and desires to add the Company as a plaintiff, Piston and the Company will cooperate to select counsel and to jointly prosecute such claim, but Piston will control such claim.

On July 11, 2003, the Company received a determination from the Internal Revenue Service that one individual the Company contracted with as an independent contractor should have been classified as an employee in 2002. This ruling also applied to any other individuals engaged by the Company under similar circumstances. The ruling stated that the Company may not be subject to adverse consequences as the Company may be entitled to relief under applicable tax laws (Section 530 of the Revenue Act of 1978). Management believes that the Company qualifies for relief under Section 530. To date, the Company has not received any further communication from the Internal Revenue Service.

In the past, some state agencies have claimed that the Company improperly classified its health professionals as independent contractors for purposes of state unemployment and/or worker's compensation tax laws and that the Company was therefore liable for taxes in arrears, or for penalties for failure to comply with their interpretation of the laws.  There are no assurances that the Company will not be subject to similar claims in other states in the future.