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Regulatory, Legal and Other Matters
6 Months Ended
Aug. 31, 2018
Commitments and Contingencies Disclosure [Abstract]  
Regulatory, Legal and Other Matters
Regulatory, Legal and Other Matters
Emmis is a party to various legal proceedings arising in the ordinary course of business. In the opinion of management of the Company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.
During the quarter ended August 31, 2017, Emmis filed suit against Hour Media Group, LLC ("Hour") for breach of the asset purchase agreement related to the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine. Hour filed a counterclaim against Emmis alleging that Emmis engaged in a series of actions that constitute a breach of the asset purchase agreement. The parties agreed to settle this dispute in May 2018. As part of the mutual settlement, all claims and counterclaims were dismissed with Emmis and Hour receiving $0.45 million and $0.2 million of the cash held in escrow, respectively. The Company recognized a loss of $0.2 million related to this settlement during the six months ended August 31, 2018, which is included in gain on sale of assets, net of disposition costs in the accompanying condensed consolidated financial statements.
Emmis filed suit against Illinois National Insurance Company (“INIC”) in 2015 related to INIC’s decision to not cover Emmis’ defense costs under Emmis’ directors and officers insurance policy in a lawsuit related to the Company’s preferred stock in which Emmis was the defendant (the “Prior Litigation”). On March 21, 2018, Emmis was granted summary judgment entitling it to coverage of its defense costs in the Prior Litigation. On October 10, 2018, Emmis and INIC agreed that the amount of Emmis' damages are $3.5 million. While we expect the District Court to enter a final judgment in this matter in the near term, INIC has stated its intention to appeal the District Court's summary judgment determination that the insurance policy covers Emmis' defense costs. Accordingly, Emmis cannot estimate the amount or timing of a recovery, if any.