Discontinued Operations

12 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 5 — Discontinued Operations

The Nexsan Business

On August 16, 2018, the Company completed the disposition of its entire interest in the Nexsan Business. Escrowed funds of $610,760, net of claims, that were held for indemnifiable costs or liabilities arising within 18 months of the transaction were remitted to the Company on February 19, 2020.

The Legacy Businesses

As of December 31, 2016, the wind-down of the Company’s Legacy Businesses was substantially complete, having effectively terminated all associated employees and ceased all operations.

On March 31, 2019, the Company entered into a securities purchase agreement with IMN Capital Holdings, Inc., a Delaware company (“IMN Capital”) to sell its entire ownership of its international subsidiaries and Imation Latin America Corp., a Delaware corporation (the “Imation Subsidiaries”) (the “Subsidiary Sale”). In connection with the sale, the purchase price furnished by IMN Capital to the Company consisted of (i) $277,900 payable upon the execution of the IMN Capital Agreement and (ii) 75% of all net proceeds from subsidiary litigation (which, for the avoidance of doubt, shall be calculated after the payment of (i) the retirement of the Germany pension liability; (ii) contingency fees payable to attorneys engaged in connection with the Subsidiary Litigation; (iii) fees payable to Mach 5, the litigation financing company and (iv) the payment of all applicable taxes including income taxes in connection with the subsidiary litigation). The Company recorded a one-time non-cash gain of approximately $10.0 million in connection with IMN Capital Agreement transaction.

As of December 31, 2019, we have substantially collected all our outstanding receivables and settled all of our outstanding payables associated with these businesses.

Results of Discontinued Operations

The operating results for the Legacy Businesses and the Nexsan Business are presented in our Consolidated Statements of Operations as discontinued operations for all periods presented and reflect revenues and expenses that are directly attributable to these businesses that were eliminated from our ongoing operations.

The key components of the results of discontinued operations were as follows:

	For the Years Ended December 31,
	2020		2019
	(In millions)
Other income	$	—	$	1.3
Income from discontinued operations, before income taxes		—		1.3
Gain on sale of discontinued businesses, before income taxes		—		9.4
Income tax benefit		—		1.0
Income from discontinued businesses, net of income taxes	$	—	$	11.7

Net income of discontinued operations for year ended December 31, 2020 decreased by $11.7 million compared to the year ended December 31, 2019, due to the Subsidiary Sale.

The income tax benefit related to discontinued operations was $0.0 million and $1.0 million for the years ended December 31, 2020 and 2019, respectively. See Note 12 - Income Taxes for additional information.

The Company no longer has any assets or liabilities of discontinued operations as of December 31, 2019.