Commitments And Contingencies

6 Months Ended

Jul. 01, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note D – Commitments and Contingencies

As a result of the disposition of its Wendy’s operations in 1996, the Company remains secondarily liable for certain real property leases with remaining terms of one to four years.The total estimated maximum amount of lease payments remaining on these eight leases as of July 1, 2012, was approximately $1,000,000.Also, in connection with the sale of its Mrs. Winner’s Chicken & Biscuit restaurant operations in 1989 and certain previous dispositions, the Company remains secondarily liable for certain real property leases with remaining terms of one to three years.The total estimated maximum amount of lease payments remaining on these 11 leases as of July 1, 2012, was approximately $500,000.Additionally, in connection with the previous disposition of certain other Wendy’s restaurant operations, primarily the southern California restaurants in 1982, the Company remains secondarily liable for real property leases with remaining terms of one to four years.The total estimated maximum amount of lease payments remaining on these five leases as of July 1, 2012, was approximately $500,000.

In February 2012, the Company agreed to a settlement of a previously disclosed lawsuit, Dionne Michelle Williams-Green v. J. Alexander’s Restaurants, Inc., pending in the United States District Court for the Northern District of Illinois.  The parties filed the terms of settlement with the court and received preliminary approval in June 2012.The settlement is subject to final court approval.  The case was filed by a former hourly employee of the Company in Illinois and was later certified as a class action on a claim that the Company’s tip share pool in two restaurants was invalid.  During the fourth quarter of 2011, the Company accrued an estimate of the amount it believes will be necessary to settle this claim.

The Company is currently undergoing a federal employment tax audit for 2009 and 2010.  The potential financial impact of this audit is not determinable at this time.

On August 10, 2012, Advanced Advisors, a purported shareholder of the Company, filed a putative class action lawsuit in the Tennessee Chancery Court for Davidson County, 20th Judicial District (the “Advanced Advisors Complaint”), against the members of the Company’s board of directors (the “Board”), the Company, Fidelity National Financial, Inc. (“Fidelity”) and New Athena Merger Sub, Inc. (“Merger Sub”). The Advanced Advisors Complaint alleges that the members of the Board breached their fiduciary duties to shareholders in connection with the Company’s entry into an agreement pursuant to which Merger Sub will commence a tender offer to acquire all of the outstanding shares of the Company’s common stock at a purchase price of $13.00 per share (the “Offer”). It also alleges that the Board and the Company breached their fiduciary duties to shareholders by making materially inadequate disclosures or omissions in the Recommendation Statement filed by the Company with the SEC in connection with the Offer (“Recommendation Statement”).The Advanced Advisors Complaint further alleges that Fidelity aided and abetted the Board’s purported breach of its fiduciary duties. In addition to seeking compensatory damages and attorneys’ fees and expenses, the Advanced Advisors Complaint seeks to enjoin the sale of the Company until the Company remedies certain alleged disclosure deficiencies in its Recommendation Statement. The Company believes the plaintiff’s allegations are without merit, and, if the plaintiff proceeds with litigation, the Company will contest the allegations vigorously.

In addition to the matters described above, the Company is from time to time subject to routine litigation and claims incidental to its business, including actions with respect to federal and state tax matters, labor-related claims and other matters. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. However, management believes that, based on current knowledge, the final outcome of these other matters will not have a material adverse effect on the Company’s financial condition, operating results or liquidity. Regardless of the outcome, legal proceedings can have an adverse effect on the Company because of defense costs, diversion of management resources and other factors.