Note 7 – Contingencies

General Litigation

The Company is a party to routine litigation incidental to its former business. Some of the actions to which the Company is a party are covered by insurance and are being defended or reimbursed by the Company’s insurance carriers.

Lease Assumption Litigation

On May 8, 2012, the Company filed a motion with the United States Bankruptcy Court for the District of Delaware for the entry of an order by the Court approving the Company’s assumption of the lease for the property located at One Syms Way, Secaucus, New Jersey. The landlord asserted a cure claim of approximately $3.5 million, plus attorneys’ fees and costs. The Company contested all but approximately $5,000 of that amount. On February 19, 2013, the Court ruled that the cure claim should be reduced and allowed at approximately $1.25 million, but reserved ruling on the claims for attorneys’ fees and a relatively minor rent issue. On March 5, 2013, the Company moved to reconsider this ruling and that motion is currently pending. Based on an agreement with the landlord in July 2013, the Company has established a reserve of $1.25 million for the potential payment of cure claims associated with assumption of the lease, which reserve has been accrued as a liability. On December 18, 2013, the Company filed a supplemental motion to assume the lease notwithstanding the outstanding cure dispute. The landlord objected to that motion on several grounds, including that the cure reserve should be increased to $4 million. On January 8, 2014, the Court held a hearing on the assumption motion and took the matter under advisement. In the event that the Company is able to assume the lease for the property, it intends to monetize it in a manner similar to the Company’s other short term properties. However, the Company cannot provide assurances that it will be able to assume the lease for the property, that the associated cure claim amount will be limited to the $1.25 million accrued liability or that the Company will be able to successfully monetize the lease in accordance with its business plan.

Bankruptcy Case

As discussed in Note 1, Syms and its subsidiaries filed voluntary petitions for relief under Chapter 11 on November 2, 2011. On September 14, 2012, a plan of reorganization became effective and Syms and its subsidiaries emerged from bankruptcy, with reorganized Syms merging with and into Trinity.