Note 11 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

1 1 . COMMITMENTS AND CONTINGENCIES

The Company was named along with multiple parties in lawsuits filed by certain owners of units and fractional interests in the project formerly known as The Ritz-Carlton Club and Residences, Kapalua Bay. The lawsuits were filed in the Circuit Court of the Second Circuit, State of Hawaii on

May 23, 2011,

June 7, 2012,

and

June 19, 2013.

The lawsuits alleged deceptive acts, intentional misrepresentation, concealment, and negligent misrepresentation, among other allegations and sought unspecified damages, treble damages and other relief.

In

September 2018,

the defendant parties reached a settlement with the plaintiffs in the

May 23, 2011

lawsuit and

two

of the

ten

plaintiffs in the

June 7, 2012

lawsuit. Under terms of the confidential settlement agreement the Company made an undisclosed payment in

October 2018

to be released from the lawsuit.

In

November 2018,

the Company reached a settlement with the

eight

remaining plaintiffs in the

June 7, 2012

lawsuit. Under terms of the confidential settlement agreement the Company’s insurance carrier made an undisclosed payment in

November 2018

to release the Company from the lawsuit. In addition, in

December 2018,

the Company’s insurance carrier reimbursed the Company for certain of the defense costs it incurred in the

June 7, 2012

lawsuit.

In

February 2019,

the Company reached a settlement with the plaintiffs in the

June 19, 2013

lawsuit. Under terms of the confidential settlement agreement the Company will be making an undisclosed payment to be released from the lawsuit. The undisclosed payment has been accrued as of

December 31, 2018

in the accompanying financial statements.

On

December 31, 2018,

the State of Hawaii Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewater effluent violations related to the Company’s Upcountry Maui wastewater treatment facility. The facility was built in the

1960’s

to serve approximately

200

single-family homes developed for workers in the Company’s former agricultural operations. The facility is made up of

two

1.5

-acre wastewater stabilization ponds and surrounding disposal leach fields.

The Order resulted from an inspection by DOH officials in

June 2018.

The Order includes, among other requirements, payment of a

$230,000

administrative penalty and development of a new wastewater treatment plant, which become final and binding – unless a hearing is requested to contest the alleged violations and penalties. The Company has requested such a hearing, which has been scheduled for

September 2019.

In the meantime, the Company intends to continue working with the DOH on a previously-approved corrective action plan to resolve and remediate the facility’s wastewater effluent issues.

The Company is presently unable to estimate the amount, or range of amounts, of any probable liability, if any, related to the Order and

no

provision has been made in the accompanying financial statements.

In addition, from time to time, the Company is the subject of various other claims, complaints and other legal actions which arise in the normal course of the Company’s business activities. The Company believes the resolution of these other matters, in the aggregate, is

not

likely to have a material adverse effect on the Company’s financial position or operations.