Commitments and Contingencies

6 Months Ended

Dec. 31, 2020

5. Commitments and Contingencies

Legal Claims

The Company is subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the ordinary course of its business activities. The Company has recognized costs and associated liabilities only for those investigations, claims and legal proceedings for which in its view it is probable that liabilities have been incurred and the related amounts are estimable.

Environmental Remediation

The Company is party to a Brownfield Cleanup Program Agreement with the New York Department of Environmental Conservation under its Brownfield Cleanup Program with respect to the Company’s property in Stuyvesant Falls, New York. The agreement recognizes that the soil and groundwater at the Stuyvesant Falls facility is impacted by chemical compounds exceeding regulatory standards. Pursuant to the agreement, the Company will conduct, at its expense, investigation and remediation at the site.

The Company’s best estimate of the expected cost to remediate the site is $1.1 million. This amount was recorded as an expense during fiscal 2020 and is reflected in other accrued liabilities and selling, general and administrative expenses in the Company’s financial statements. As of December 31, 2020, the Company has paid approximately $104,000 in remediation expenses which have been charged to the initial reserve.

Liability for future environmental expenditures


Balance - July 1, 2020	$	1,037,000
Charges to income		—
Remedial and investigatory spending		21,535
Balance - December 31 , 2020	$	1,015,465

	December 31, 2020		June 30, 2020
Reflected in the Balance sheet as:
Current, included in Other Liabilities	$	991,465	$	514,000
Long-term environmental		24,000		523,000
Total liability	$	1,015,465	$	1,037,000

Employment Contract

The Company has entered into an employment contract with its chief executive officer with annual renewals. The contract includes termination without cause and change of control provisions, under which the chief executive officer is entitled to receive specified severance payments generally equal to two times ending annual salary if the Company terminates his employment without cause or he voluntarily terminates his employment with “good reason.” “Good Reason” generally includes changes in the scope of his duties or location of employment but also includes (i) the Company’s written election not to renew the Employment Agreement and (ii) certain voluntary resignations by the chief executive officer following a “Change of Control” as defined in the Agreement.