Calculation of termination fees

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Reference no: EM1316190

Prior to entering into the EPL Merger Agreement, Stone terminated its merger agreement with Plains Exploration and Production Company ("Plains") and Plains Acquisition Corp. ("Plains Acquisition") on June 22, 2006. As required under the terms of the terminated merger agreement among Stone, Plains and Plains Acquisition, Plains was entitled to a break-up fee of $43.5 million, which was advanced by EPL to Plains on June 22, 2006." (From Stone Energy Corporation's Form 8-K dated June 26, 2006 available at www.sec.gov).

How should the termination fee be accounted for in each of the three companies?

Reference no: EM1316190

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