Note 10. Related Party Transactions
Atlantic Blue Group, Inc.
Atlantic Blue Group, Inc. ("Atlanticblue" or "ABG") owns approximately 51% of Alico's common stock. By virtue of its ownership percentage, Atlanticblue is able to elect all of the directors and, consequently, control Alico. Directors which also serve on Atlanticblue's board are referred to as "affiliated directors". Atlanticblue issued a letter dated December 3, 2009, reaffirming its commitment to maintain a majority of independent directors (which may include affiliated directors) on Alico's board. To be considered independent under Nasdaq rules a director may not be employed by Alico or engage in certain types of business dealings with Alico. In addition as required by Nasdaq rules, the Board is required to make an affirmative determination that the director has no relationships which would interfere with the exercise of independent judgment in carrying out the responsibilities as a director.
John R. Alexander, a major shareholder in Atlanticblue, serves as Chairman of the Company's Board of Directors. Mr. Alexander's son, JD Alexander, resigned March 31, 2012 as the President and Chief Executive Officer of Atlanticblue and did not stand for re-election as a director at the June 2012 Atlanticblue shareholder meeting. John R. Alexander was elected to the Atlanticblue Board of Directors in June 2012. In February 2010, JD Alexander was appointed Alico's President and Chief Executive Officer, and he serves on Alico's Board of Directors. Robert E. Lee Caswell, John R. Alexander's son-in-law, serves as a Director on the Alico Board of Directors. Robert J. Viguet, Jr., an Alico director, did not stand for re-election as a director of Atlanticblue at its June 2012 shareholder meeting.
Former director Baxter Troutman filed a derivative shareholder suit against John R. and JD Alexander. The Company is reimbursing Messrs.' Alexander for legal fees to defend themselves against the suit in accordance with the Board of Directors indemnification agreement. All reimbursements are approved by the Special Committee of the Board comprised of four independent directors. For the three months ended December 31, 2012, reimbursements for litigation on behalf of John R. Alexander and JD Alexander were $1,000 and $2,000, respectively. For the three months ended December 31, 2011, reimbursements made on behalf of John R. Alexander and JD Alexander were approximately $42,000 and $113,000, respectively.
Alico Fruit is currently marketing citrus fruit for TRI-County Grove, LLC, a wholly owned subsidiary of Atlanticblue. During the three months ended December 31, 2012 and 2011, Alico Fruit marketed 30,233 and 56,474 boxes of fruit, for approximately $251,000 and $554,000, respectively.
Ben Hill Griffin, Inc.
Citrus revenues of $0 and $120,000 were recognized for a portion of citrus crops sold under a marketing agreement with Ben Hill Griffin, Inc. ("Griffin") for the three months ended December 31, 2012 and 2011, respectively. Griffin and its subsidiaries are controlled by Ben Hill Griffin, III, the brother-in-law of John R. Alexander, Alico's Chairman and former Chief Executive Officer. Accounts receivable in the Condensed Consolidated Balance Sheets include amounts due from Griffin of $66,000 and $94,000 at December 31, 2012 and September 30, 2012, respectively. These amounts represent estimated revenues to be received periodically under pooling agreements as the sale of pooled products is completed.
Alico purchases fertilizer and other miscellaneous supplies, and services, and operating equipment from Griffin, on a competitive bid basis, for use in its cattle, sugarcane, sod and citrus operations. Such purchases totaled $9,000 and $308,000 for the three months ended December 31, 2012 and 2011, respectively. The accompanying Condensed Consolidated Balance Sheets include accounts payable to Griffin for fertilizer and other crop supplies totaling approximately $6,000 and $10,000 at December 31, 2012 and September 30, 2012, respectively.