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Note 12 - Legal Proceedings
12 Months Ended
Jun. 30, 2013
Disclosure Text Block Supplement [Abstract]  
Legal Matters and Contingencies [Text Block]

Note 12 – Legal Proceedings


On June 28, 2012, Overland Storage, Inc. (“Overland”) filed a patent infringement lawsuit against Qualstar Corporation in the U.S. District Court in the Southern District of California, alleging that certain of our automated tape libraries infringe claims of U.S. Patent No. 6,328,766. Overland is seeking injunctive relief as well as the recovery of unspecified monetary damages. We do not believe we infringe the Overland patent and we intend to defend ourselves vigorously. Due to the inherent uncertainty of litigation, we cannot identify probable or estimable damages related to the lawsuit at this time.


In August 2013, the company filed a lawsuit in the Superior Court for the State of California, City of Los Angeles, case number BC514889 against the former CEO, Lawrence D. Firestone (“Defendant”) et al, and includes claims for breach of fiduciary duties, breach of duty of loyalty, breach of duty of care, and corporate waste. After requests for change of venue were sought by Defendant, on September 16, 2013, the case was remanded back to the Superior Court by the United States Court for the Central District of California, Western Division. The possibility exists that Defendant could initiate counter-claims against the Company, but the probability of these actions or the likely results are not currently ascertainable. At this time, no evaluation can be made as to the likelihood of a favorable or unfavorable outcome.


We also are subject to a variety of other claims and legal proceedings that arise from time to time in the ordinary course of our business. Although management currently believes that resolving claims against us, individually or in the aggregate, will not have a material adverse impact on our financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. We accrue loss contingencies in connection with our commitments and contingencies, including litigation, when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. As of June 30, 2013, we had accrued aggregate current liabilities of $83,000 in probable fees and costs related to our contingent legal matters.