| 2016-10-03 12:59:49|
CUO 12:59 10/03 10/03/16
Continental Materials reports issuance of partial summary judgment in Valco case
Continental Materials Corporation reported that on September 15, 2016 Partial Summary Judgment was issued regarding the company's previously disclosed litigation, Continental Materials Corporation v. Valco, Inc., Civil Action No. 2014-cv-2510 filed in the United States District Court of the District of Colorado. The suit regards a sand and gravel lease between the company and Valco, Inc. that calls for the payment of royalties over the life of the lease on an agreed 50M tons of sand and gravel reserves. In the suit, the company sought, among other things, to reform the sand and gravel lease in regard to the agreed amount of sand and gravel reserves and to recover approximately $1,259,000 of royalty overpayments. The company paid royalties on approximately 17.5M tons, including the overpayments, through the end of the third quarter of 2014. The Partial Summary Judgment resolved many of the company's claims in Valco's favor, but the company's claim for the return of royalty overpayments made during the statutorily allowed period is still pending. The company and its legal counsel believe there are grounds to appeal the Partial Summary Judgment as the court improperly resolved factual issues that should have been decided by a jury. Though the company believes there is a likelihood that the Partial Summary Judgment will be reversed on appeal, there can be no assurance that an appeal will result in reversal. The company is considering whether any reserves are required to be recorded as a result of the Partial Summary Judgment.