American Green Inc (ERBB)

[neilbolton]

I was told and it makes sense to me is that Sony/BMG was attempting to write-off this expense on their taxes and they were informed that they hadn't made any/all attempts to collect the expense.

I can't see it as an obligation imposed by the taxman. That would be very unusual, as companies constantly write off stuff they deem not worth pursuing. But if BMG were trying to claim the amount through an insurance policy, then I could see the insurance company insisting that all avenues first be explored.

The insurance company won't have to bear the cost of the litigation, so it is no skin of its back if BMG loses (they still will at most pay the original claim). But the taxman would only end up having a bigger expense being written off, as the litigation costs are also claimable as an expense.