|
Related Party Transactions
|
12 Months Ended |
|---|---|
|
Jun. 30, 2013
|
|
| Related Party Transactions [Abstract] | |
| Related Party Transactions |
Note 13 - Related Party Transactions
US Federal tax withholding. During the third quarter of fiscal year 2012, the Company identified a potential liability of approximately $2.0 million related to the Company's failure to make the required US Federal tax withholding in the course of its initial acquisition of NP. In October 2009, Magellan acquired 83.5% of the membership interests in NP (the "Poplar Acquisition"), from the two majority owners of NP, White Bear LLC ("White Bear") and YEP I, SICAV-FES ("YEP I"). Both of these entities are affiliated with Mr. Bogachev, a former Director of Magellan and a foreign national. Due to the status of YEP I as foreign entity and the members of White Bear as foreign nationals, Magellan was required to make US Federal tax withholdings from the payments to or for the benefit of White Bear and YEP I. Of the $2.0 million liability, $1.3 million was estimated to relate to the interest sold by White Bear, $0.6 million to the interest sold by YEP I, and $0.1 million to Magellan's interest on late payment of the US Federal tax withholdings. Upon the filing of US income tax returns in relation to the Poplar Acquisition and payment of corresponding income taxes by White Bear and YEP I, Magellan is deemed to be relieved of its liability for the US Federal tax withholdings as well as related penalties and interest except for Magellan's interest on late payment of the US Federal tax withholdings.
With regards to White Bear, Mr. Bogachev filed his US income tax return and paid taxes due on the Poplar Acquisition, and Magellan has no further related potential liability. With regards to YEP I, which is now a defunct entity, Magellan concluded that it was unlikely that one of YEP I's successor entities would file a corresponding US income tax return. As a result, the Company initiated a disclosure process with the IRS. As a result of this disclosure process the Company's total liability with respect to this matter was determined to be approximately $0.1 million, which was paid as of June 30, 2013.
As of June 30, 2012, we recorded a total liability of $1.0 million under accrued and other liabilities in the consolidated balance sheets related to this matter. That amount is comprised of the $0.3 million payment to Mr. Bogachev, $0.6 million in withholdings, penalties, and interest related to YEP I, and $0.1 million related to Magellan's interest on late payment of the US Federal tax withholdings. The effect of the disclosure process with the IRS on the consolidated statements of operations for the year ended June 30, 2012, resulted in an expense of $0.9 million recorded under general and administrative expense and an interest expense of $0.1 million. The effect of this transaction on the consolidated statements of operations for the year ended June 30, 2013, resulted in other income of $0.4 million representing the difference between the original estimate and the estimated final liability of $0.1 million related to the YEP I withholding obligation.
Office lease. The Company leased its prior Denver office space from an entity owned, in part, by J. Thomas Wilson, President and CEO of the Company and a member of the Company's Board of Directors. The total lease expense paid under this arrangement was $11 thousand and $72 thousand for the fiscal years ended June 30, 2013, and 2012, respectively. Following the relocation of the Company's headquarters to Denver, Colorado, a lease agreement for new office space was entered into with an unrelated party in August 2012. Separately, Mr. Wilson provided consulting services to the Company related to its Australian operations while a member of the Board of Directors but prior to becoming President and CEO of the Company in September 2011. As a result, consulting fees of $0 and $59 thousand for fiscal years ended June 30, 2013, and 2012, respectively, were paid to Mr. Wilson.
PFC Energy. J. Robinson West, the Chairman of the Board of Directors of the Company, is also Chairman, Founder, and CEO of PFC Energy ("PFC"). PFC has served as a consultant for the Company on various Australian projects. As of June 30, 2013 and 2012, there were no consulting arrangements between the Company and PFC in place or planned. The total consulting fees paid to PFC during the fiscal year ended June 30, 2012, was $64 thousand for work performed primarily in fiscal year 2011.
See Note 2 for information related to transactions the Company entered into with NT and ER, effective September 1, 2011.
|