(18) CONTINGENCIES We are aware of certain instances wherein the insurance companies denied payment on policies in which we arranged the settlement with purchasers. Most of these denials are related to unforeseeable reduction in face value. Face value of the policies in question total $541,665 and are recorded in accrued settlement expense at February 29 and May 31, 2012. During fiscal 2012, we accrued an additional $356,120 for future claims that might arise in relation to these policies and paid $19,546 of settlements during the year, which had been accrued in previous periods. There was no activity in accrued settlement expense in the current quarter. There have been no material developments during the current quarter for legal proceedings that were disclosed in our Annual Report on Form 10-K for the year ended February 29, 2012 (the  2012 Annual Report  ). For a full disclosure of legal proceedings, please reference our 2012 Annual Report. We record provisions in the Condensed Consolidated Financial Statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. Except as discussed elsewhere in this note : (i) management has not concluded that it is probable that a loss has been incurred in any pending litigation; or (ii) management is unable to estimate the possible loss or range of loss that could result from an unfavorable outcome of any pending litigation; and (iii) accordingly, management has not provided any amounts in the Condensed Consolidated Financial Statements for unfavorable outcomes, if any. It is possible that our consolidated results of operations, cash flows or financial position could be materially affected in a particular fiscal quarter or fiscal year by an unfavorable outcome or settlement of any pending proceeding. Nevertheless, although litigation is subject to uncertainty, management believes, and we have been so advised by counsel handling the respective proceedings, that we have a number of valid legal