Commitments and Contingencies Commitments and Contingencies

3 Months Ended

Feb. 28, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingent Liabilities

The Company has been engaged in litigation since 2008 in the United States District Court for the District of Maryland regarding whether the Company is required by a contract it entered into in 2005 to purchase a property in Maryland. After entering into the contract, the Company later renegotiated the purchase price, reducing it from $200 million to $134 million, $20 million of which has been paid and subsequently written off, leaving a balance of $114 million. In January 2015, the District Court rendered a decision ordering the Company to purchase the property for the $114 million balance of the contract price, to pay interest at the rate of 12% per annum from May 27, 2008, and to reimburse the seller for real estate taxes and attorneys’ fees. The Company believes the decision is contrary to applicable law and will appeal the decision. The Company does not believe it is probable that a loss has occurred and, therefore, no liability has been recorded with respect to this case. If the District Court decision were affirmed in its entirety, the Company would purchase the property and record it at fair value, which the Company believes would not result in a loss. The amount of interest the Company would be required to pay would depend on a number of questions currently pending before the District Court, including whether the interest the Company would be required to pay is simple interest or compound interest, and whether during the pendency of the appeal post-judgment interest would accrue at 12% per annum or at the federal post-judgment rate, which is substantially less than 12% per annum. Simple interest on $114 million at 12% per annum from May 27, 2008 to January 22, 2015 (the date of the District Court decision) would total $91.1 million and real estate taxes for that period would total $1.6 million. If post-judgment interest is simple interest on $114 million at 12% per annum, it would accrue at the rate of $13.7 million per year. The Company has not engaged in discovery regarding the amount of the plaintiffs’ attorneys’ fees. If the District Court decision were totally reversed on appeal, the Company would not have to purchase the property or pay interest, real estate taxes or attorneys’ fees.