Commitments And Contingencies

9 Months Ended

Sep. 30, 2014

Commitments And Contingencies [Abstract]

Commitments And Contingencies

Note 8.  Commitments and Contingencies

Commitments

Leases

On August 26, 2014, we reacquired a US flagged PCTC that we had previously been operating under a sale-leaseback arrangement.  The vessel purchase was financed through conventional bank financing.  For more information, see Note 21 – Early Lease Buy Out.  For more information about our leases, please see our Annual Report on Form 10-K for the year ended December 31, 2013.

Investment in newbuildingHandysize Dry Bulk Carrier

During the third quarter of 2014, we were notified of the bankruptcy of a ship builder that had agreed to build a new Handysize Dry Bulk Carrier for an entity in which we are an investor.  In accordance with the terms of the shipbuilding contract, the contract was terminated and all deposits to date are to be refunded by the guarantor bank within thirty days of notice.  As of September 30, 2014, we reclassified our $3.8 million deposit towards the purchase price of this vessel plus interest of $300,000 from construction in progress to a current receivable.  We believe the $4.1 million to be collectible within twelve months of September 30, 2014.

Letters of Credit

As of September 30, 2014, we have approximately $9.0 million in outstanding letters of credit, $8.0 million of which were issued under our revolving credit facility.

Contingencies

On June 26, 2014, U.S. Customs and Border Protection (CBP) issued pre-penalty notifications to us and two of our affiliates alleging failure to properly report the importation of spare parts incorporated intoour vessels covering the period April 2008 through September 2012.  CBP’s proposed duty is approximately $2.1 million along with a proposed penalty on the assessment of approximately $8.4 million.  The basis of CBP’s assessment is that the U. S. Government experienced a loss of revenue consisting of the difference between the government’s ad valorem duty and the consumption entry duty actually paid by us.  On September 24, 2014, we submitted our formal response to CBP’s claim and denied violating the applicable U.S. statute or regulations.We have not accrued a liability for this matter because the case is ongoing and we do not consider it probable that we will incur a loss.