Note 10 - Contingencies

9 Months Ended

Mar. 31, 2012

Contingencies Disclosure [Text Block]

10.     CONTINGENCIES

From time to time, Mediware becomes involved in routine litigation incidental to the conduct of its business, including employment disputes and litigation alleging product defects, intellectual property infringements, violations of law and breaches of contract and warranties.  Mediware believes that such routine litigation, if adversely determined, would not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

Mediware is currently working with a longstanding vendor of third-party software regarding the amounts invoiced by the vendor to Mediware for its use of the vendor’s product.  The vendor prices its software licenses on a per-unit basis.  The vendor is investigating whether it should have priced the software licensed to Mediware on a basis different than the vendor has invoiced Mediware over the past several years, which could result in additional required payments to the vendor.  Although the vendor’s initial demands were substantially greater, during the second fiscal quarter Mediware and the vendor engaged in preliminary settlement discussions. Based on those discussions, which are ongoing, Mediware has estimated a range of possible loss of $0.1 to $0.7 million related to this issue.  Management and the vendor have agreed on an insignificant portion of the vendor’s position. Mediware has accrued $0.2 million related to this issue at March 31, 2012.