Note 14 - Other Matters

12 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

14. OTHER MATTERS

The Company is a party to a lawsuit arising out of the conduct of its ordinary course of business.  A global settlement of claims has been approved by the court and management expects a settlement agreement to be executed by the plaintiffs.  While execution of the settlement agreement by the plaintiffs cannot be predicted with certainty, the ultimate liability under such lawsuit is covered by the Company’s insurance and management does not expect that the court-approved amount of the settlement or any other ultimate liability, if any, arising out of such lawsuit, will have a material adverse effect on the financial position or results of operations of the Company.

The Company has entered into agreements with seven of its executive officers and a vice president, which provide certain benefits in the event of a change in control of the Company.  A “change in control” of the Company is defined as, in general, the acquisition by any person of beneficial ownership of 20% or more of the voting stock of the Company, certain business combinations involving the Company or a change in a majority of the incumbent members of the Board of Directors, except for changes in the majority of such members approved by such members.  If, within two years after a change in control, the Company or, in certain circumstances, the executive, terminates his employment, the executive is entitled to a severance payment equal to 2.99 times (1) such executive’s highest annual salary within the five-year period preceding termination plus (2) a bonus increment equal to the average of the two highest of the last five bonuses paid to such executive.  In addition, the executive is entitled to the continuation of all employment benefits for a three-year period, the vesting of all stock options and certain other benefits.  As of March 31, 2014, the estimated potential aggregate compensation payable to these seven executive officers and vice president under the Company’s compensation and benefit plans and arrangements in the event of termination of such executive’s employment following a change in control amounted to approximately $12,556.

The Company’s Tennessee facility, which is comprised of approximately 25 acres in a light industrial park located in Gallaway, Tennessee, was acquired by Medegen Medical Products, LLC in 1999 prior to the Company’s ownership of Medegen.  In connection with an environmental due diligence evaluation of the facility prior to its acquisition by Medegen, consultants detected the presence of chlorinated solvents in groundwater beneath the manufacturing plant.  The identified groundwater contamination is in the process of being remediated.  At the time of our acquisition of Medegen, the prior owner of the facility agreed to retain responsibility for the remediation of the contamination and to fully indemnify our company for all costs associated with the environmental remediation as well as any claims that might arise, including third party claims.  Under an agreement executed at the time of the sale, Vollrath Group, Inc. and its parent Windway Capital Corp. (collectively, “Indemnitor”) are required, on a quarterly basis, to provide documentation from independent parties confirming that Indemnitor has sufficient assets, in the form of unencumbered, unrestricted cash, marketable securities or unused and available borrowing capacity, as necessary to pay the most recently estimated costs of outstanding environmental remediation obligations.  Now that full-scale remediation is underway at the site, Indemnitor is also required to provide Letters of Credit (“LC”) to secure its current and future obligations, including a $2,000 LC that is currently open and future LCs in the amount of $1,000 from December 7, 2014 through December 7, 2017.  As of March 31, 2014, we have recorded an estimated liability of $4,200 to remediate the groundwater contamination and corresponding amount due from the Indemnitor.  As part of the divestiture of the Patient Care business unit, the related asset and liabilities are reported as held for sale at March 31, 2014 (see Footnote 3 – Discontinued Operations).