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EX-31.1 - SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICER - DESTINY MEDIA TECHNOLOGIES INCexhibit31-1.htm
EX-31.2 - SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICER - DESTINY MEDIA TECHNOLOGIES INCexhibit31-2.htm
EX-23.2 - CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - DESTINY MEDIA TECHNOLOGIES INCexhibit23-2.htm
EX-32.1 - SECTION 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICER - DESTINY MEDIA TECHNOLOGIES INCexhibit32-1.htm
EX-32.2 - SECTION 906 CERTIFICATION OF CHIEF FINANCIAL OFFICER - DESTINY MEDIA TECHNOLOGIES INCexhibit32-2.htm
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CONTINGENCIES
12 Months Ended
Aug. 31, 2012
CONTINGENCIES [Text Block]

9. CONTINGENCIES

  a)

On June 10, 2011, the Company commenced proceedings in the Federal Court of Australia against Shooting Star Picture Company Pty Ltd, Peter Skillman and D-Star Music Delivery Pty Ltd. (collectively the “respondents”). The Company alleged various claims against the respondents including, breach of contract, misleading and deceptive conduct, breach of fiduciary duties, and breach of confidence.

   

 

   

On March 5, 2012, the Company reached a settlement with the respondents whereby the respondents will pay $825,000 AUD (US $858,194) to the Company over the course of 72 months. The unpaid balance will attract interest of 10.25% per annum compounded monthly for total payments of approximately $1,083,000 AUD (US $1,118,000). The respondents are mutually and severally liable and the payments are secured by a registered charge against real estate located in Australia. Additionally, the respondents have agreed not to approach various clients of the Company.

   

 

   

The settlement amount receivable has been accrued in these financial statements as of August 31, 2012 [ note 3 ].

   

 

  b)

On August 12, 2009 the Company received a statement of claim for wrongful dismissal for approximately $181,000 ($180,000 CDN) plus an award of stock options and unspecified damages. On April 16, 2012, the Supreme Court of British Columbia dismissed the claim in its entirety and awarded costs to the Company. The Company recovered approximately CDN$30,000 in costs from the plaintiff and recorded this amount as a recovery to general and administrative expenditures during the year ended August 31, 2012

  c)

On November 8, 2011, the Company was served with a Notice of Civil Claim in the Supreme Court of British Columbia from Noramco Capital Corporation for $100,000 plus interest. The claim asserts that the Company has repudiated a subscription agreement entered into in, or around, August 2000. Management believes the claim is without merit and that the likelihood that the outcome of this matter will have a material adverse impact on its result of operations, cash flows and financial condition of the Company is remote. The Company has filed a counterclaim for damages arising from a proposed private placement in 2000 which did not close. The Company alleges that the beneficial owner of Noramco was a partner in the firm that was leading the proposed financing.

     
  d)

Destiny had commenced two outstanding Canadian lawsuits (Federal Court of Canada Court File No. T-413-06 and Ontario Superior Court Ontario Court File No. 07-CV- 38068 as a result of certain activities undertaken by Yangaroo Inc., a Canadian competitor (“Yangaroo”). Destiny was a defendant by counterclaim. A third lawsuit was launched in the United States (US District Court for the Eastern District of Wisconsin Green Bay Division Case No. 1:09-CV-00462), in which Destiny was defendant. The US District Court lawsuit dismissed Yangaroo’s claim in its entirety with the dismissal upheld on appeal during 2011.

     
   

On June 17, 2011 Destiny entered into a settlement agreement (the “Settlement Agreement”) with Yangaroo to settle all outstanding litigation. Pursuant to the Settlement Agreement, Yangaroo paid Destiny a lump sum amount totaling $606,540 ($600,000 Canadian Funds). The settlement payment was received and recorded during the year and has been credited against legal fees included in general and administrative expenses on the statements of operations for the year ended August 31, 2011.

     
   

As part of the settlement Destiny also acquired a cost and royalty free, non-exclusive, worldwide, irrevocable, license to two patents held by Yangaroo (US Patent No. 7,529,712 and Canadian Patent No. 2,407,774). No value was assigned or recorded to the licenses to Yangaroo’s patents. Each party has agreed not to make any claim for costs against the other party.