Litigation and Contingencies

6 Months Ended

Jun. 30, 2012

Litigation and Contingencies

Litigation and Contingencies

NOTE 11: Litigation and Contingencies

• Mexico Liftboat Incident

        The Company was a defendant in lawsuits arising out of the September 8, 2011 liftboat incident in the Bay of Campeche, Gulf of Mexico filed by two surviving crewmembers of the liftboat who were employees of the liftboat owner/operator and the heirs of two deceased crewmembers of the liftboat who were employed by the liftboat owner/operator and the heirs of two decedents who were employees of a Geokinetics operating company. The lawsuits were styled: Randal Reed v. Trinity Lifeboat Services, LLC, Trinity Lifeboat Services No. 2 LLC.; United States District Court, Western District of Louisiana, Lafayette Division, C.A. No. 6:11-cv-01868; and Ted Derise, Jr., et al. v. Advanced Seismic Technology, Inc.; 11th Judicial District Court of Harris County, Texas; C.A. No. 2012-12812. On April 19, 2012, the plaintiffs, the defendants and the insurance companies negotiated and executed confidential agreements to resolve these claims which resulted in no material cost being incurred by the Company other than legal costs previously expended in defending the claim.

• California Labor Class Action

        In July 2011, the Company was named as a Defendant in a lawsuit styled Reuben Moncada, et al. v. Petroleum Geo-Services, et al. filed in the Superior Court of California in Kern County. This is a wage-and-hour class action lawsuit where the plaintiffs claim that they were not properly compensated from June 2009 to April 2010 for meal and rest breaks, in addition to overtime pay. The parties entered into a settlement agreement on or around July 9, 2012 subject to Court approval. On August 6, 2012, the Court entered an order granting preliminary approval of the settlement. A subsequent hearing has been scheduled for October 19, 2012, during which the Court will determine final approval of the settlement.

• Taxes Related to International Operations

        Historically, the Company did not adequately monitor the time in country for its third country nationals performing work for the Company in certain countries in which it operated and thus may have under reported the taxes due for these employees. The Company has made an assessment of the potential liability related to these taxes and has recorded a provision at June 30, 2012 and December 31, 2011.

• International Labor Claims

        The Company has received adverse verdicts with respect to several international labor claims and is currently appealing these verdicts.

• Other Contingencies

        The Company is party to various other claims and legal actions arising in the ordinary course of business. Management is of the opinion that none of these claims and actions will have a material adverse impact on the Company's financial position, results of operations, or cash flows.

        With respect to the Company's various contingencies, the Company had a provision of $14.1 million and $12.7 million, included in accrued expenses at June 30, 2012 and December 31, 2011, respectively, for estimated costs related to these claims.