Commitments and Contingencies
|9 Months Ended|
Jun. 30, 2023
|Commitments And Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
Note 12. Commitments and Contingencies
Letters of Credit
The Company had outstanding standby letters of credit in the total amount of approximately $248,000 and $310,000 at June 30, 2023 and September 30, 2022, respectively, to secure its various contractual obligations.
From time to time, Alico may be involved in litigation relating to claims arising out of its operations in the normal course of business. There are no current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial condition.
On February 17, 2023, a class action complaint was filed in the Middle District of Florida captioned Sinder v. Alico, Inc. et al., Case No. 2:23-cv-00107 (the “Sinder” matter) asserting violations of Sections 10(b) and 20(a) of the Exchange Act of 1934 against the Company and certain of its current and former officers on behalf of a putative class of investors who purchased the Company’s common stock between February 4, 2021 and December 13, 2022. The complaint alleges, among other things, that the Company and certain of its current and former officers made false and misleading statements and failed to disclose certain information regarding the Company’s financial reporting and December 13, 2022 restatement of the Company’s previously issued
financial statements. Plaintiff seeks damages, interest, costs, expenses, attorneys’ fees, and other unspecified relief. The Court overseeing the Sinder matter has ordered the plaintiff to file an amended complaint on or before August 28, 2023. In response, the Company anticipates moving to dismiss the amended complaint on behalf of all defendants, on or before October 27, 2023. All discovery is stayed in the Sinder matter pending a ruling on the Company’s anticipated motion to dismiss.
On March 7, 2023, an alleged shareholder filed a derivative complaint purportedly on behalf of the Company against certain of its current and former officers and directors in the 20th Judicial Circuit for Lee County, Florida captioned Assad v. Brokaw et al., Case # 23-CA-001484 (the “Assad” matter). The complaint asserts claims of breach of fiduciary duty and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above. The complaint seeks an unspecified sum of damages, interest, restitution, expenses, attorneys’ fees and other equitable relief. On June 20, 2023, the Court entered an order staying proceedings in the Assad matter until a ruling on the Company’s anticipated motion to dismiss in the Sinder matter.
The Company believes that the claims in both the Sinder and Assad matters are without merit. Although the outcome of any complex litigation is inherently uncertain, based on information presently known to management, the Company does not believe that the matters will have a material adverse impact on its financial condition.
The Company enters into contracts for the purchase of citrus trees during the normal course of its business. As of June 30, 2023, the Company had approximately $4,380,000 relating to outstanding commitments for these purchases that will be paid upon delivery of the remaining citrus trees.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef