International Shipholding Corporation Makes Announcement.NEW ORLEANS--(BUSINESS WIRE)--Dec. 30, 1998--On December 15, 1998, International Shipholding Corporation (NYSE NYSE See: New York Stock Exchange : ISH ISH In Situ Hybridization ISH Isolated Systolic Hypertension ISH Irish Sport Horse ISH Intermediate System Hello ISH International Society of Hypnosis ISH Information Super Highway ISH International Superhits (Green Day album) ) was notified that Seminole Electric Cooperative, Inc. ("SECI SECI Southeast European Cooperative Initiative SECI Secure Electronic Commerce Infrastructure ") had filed suit against the Company's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Central Gulf Lines, Inc. ("CGL"), seeking a declaratory judgment that SECI is entitled to terminate its performance under a long-term coal transportation agreement with CGL, subject to SECI's obligation to pay "fair and lawful damages" to CGL. SECI has also asked the court to determine the amount of damages payable to CGL as a result of termination of its performance. The suit was filed in the United States District Court for the Middle District of Florida The United States District Court for the Middle District of Florida serves the residents of thirty-five counties from eight courthouses. The counties are: Baker, Bradford, Brevard, Charlotte, Citrus, Clay, Collier, Columbia, De Soto, Duval, Flagler, Glades, Hamilton, Hardee, (Case Number 98-2561-CIV-T-25B). The suit is in connection with an agreement entered into in 1981, which provides for CGL to transport for SECI a minimum of 2.7 million tons of coal annually through September 2004 by barge from Mt. Vernon, Indiana to Port St. Joe, Florida Port St. Joe is a city in Gulf County, Florida, United States. The population was 3,644 at the 2000 census. As of 2004, the population recorded by the U.S. Census Bureau is 3,638 [1]. It is the county seat of Gulf County. . The agreement requires SECI to pay for the water transportation segment of the contract on a "cost-plus" basis and the transfer from barge to rail on a rate basis, and SECI alleges that the cost of the contract exceeds the total cost of currently available all-rail transportation. After failing to negotiate a buy-out of the agreement with CGL, SECI notified CGL on December 15, 1998 that it was terminating performance under the agreement, commencing alternative rail transportation, and commencing litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. to confirm its ability to terminate performance and to establish the damages owed to CGL as a result of such termination. SECI's complaint states that it is "prepared to pay damages to CGL properly calculated to return to CGL the value of the profits that CGL otherwise would earn over the remaining term" of the agreement. CGL has disputed SECI's right to terminate performance and has served a demand for arbitration pursuant to the terms of the agreement in which CGL seeks specific performance of the agreement for its remaining six-year term, and in the alternative, damages. Because of SECI's admitted obligation to reimburse CGL for its lost profits, the Company does not believe that this dispute will have a material adverse effect on its financial condition or results of operations, even if SECI is successful in terminating its performance under the agreement. |
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