STEEL FABRICATION OPERATIONS. The accompanying balance sheets as of June 30, 1995 and 1994 include accruals of $8,363,000 and $7,903,000, respectively, for the remaining costs expected to be incurred in phasing out the Company's steel fabrication operations (see Notes 9 and 11). These costs are principally related to health insurance and death benefits for former employees and are stated at the actuarially determined discounted present value. These operations were discontinued in 1981. In February 1994, the operators of a steel fabricating facility filed a complaint against a previous operator of the facility and a former subsidiary of Johnxxxx xxxch had operated the facility earlier before its close in 1981. The complaint seeks to have the earlier operators bear the response costs incurred in remediation of contamination at the plant site. Such costs are alleged to be approximately $3,900,000; however, the Company disputes such costs. The trial of the case began in the United States District Court for the Eastern District of Pennsylvania on July 20, 1995 and was concluded on August 25, 1995. Briefs by all of the parties are to be filed before a decision is rendered, which is not expected until 1996. In June 1995, the Company established a reserve of $1,000,000 for costs which it may incur in connection with the final resolution of the dispute. In addition, the Company has established a reserve in the amount of $200,000 as an estimate of potential legal and other costs to be incurred in connection with defending this matter. Although management believes that the accruals described above are sufficient to cover the estimated costs of such matters, the ultimate outcome of the litigation cannot presently be determined.
STEEL FABRICATION OPERATIONS. The accompanying balance sheets as of June 30, 1995 and 1994 include accruals of $8,363,000 and $7,903,000, respectively, for the remaining costs expected to be incurred in phasing out the Company's steel fabrication operations (see Notes 9 and 11). These costs are principally related to health insurance and death benefits for former employees and are stated at the actuarially determined discounted present value. These operations were discontinued in 1981. In February 1994, the operators of a steel fabricating facility filed a complaint against a previous operator of the facility and a former subsidiary of Johnxxxx xxxch had operated the facility earlier before its close in 1981. The complaint seeks to have the earlier operators bear the response costs incurred in remediation of contamination at the plant site. Such costs are alleged to be approximately $3,900,000; however, the Company disputes such costs. The lawsuit is presently in the litigation process. In June 1995, the Company established a reserve of $1,000,000 for costs which it may incur in connection with the final resolution of the dispute. In addition, the Company has established a reserve in the amount of $200,000 as an estimate of potential legal and other costs to be incurred in connection with defending this matter. Although management believes that the accruals described above are sufficient to cover the estimated costs of such matters, the ultimate outcome of the litigation cannot presently be determined.
