Best Buy 2005 Annual Report Download - page 31

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and August 7, 2002, that resulted in artificially inflated
Global Sourcing prices of our common stock. Subject to plaintiffs’ right to
In support of our global sourcing initiative, we leased appeal the Court’s Order, this matter is resolved. We
office space in China totaling approximately 15,000 believe the allegations are without merit and, in the event
square feet at the end of fiscal 2005. of an appeal, intend to continue to defend this action
vigorously.
Operating Leases We were also served with a shareholder derivative action
Almost all of our stores and a majority of our distribution venued in Hennepin County District Court, State of
facilities are leased. Terms of the lease agreements Minnesota, which raises many factual matters similar to
generally range up to 20 years. Most of the leases those raised in the federal securities law case, above
contain renewal options and escalation clauses. described. This case alleges violations of state law relative
to fiduciary responsibilities, control and management of
Additional information regarding our operating leases is
our company and unjust enrichment and seeks judgment
available in Note 7, Leases, of the Notes to Consolidated
in favor of Best Buy Co., Inc. against certain named
Financial Statements, included in Item 8, Financial
officer and director defendants for damages, equitable
Statements and Supplementary Data, of this Annual
relief and attorneys’ fees, costs and expenses. By
Report on Form 10-K.
agreement between the parties, this case has been on
Item 3. Legal Proceedings. inactive status pending a decision on our Motion to
Dismiss in the referenced federal securities law case. If the
On April 12, 2005, the U.S. District Court for the District plaintiffs don’t agree to dismiss the action voluntarily, then
of Minnesota entered an Order dismissing with prejudice we expect the named officer and director defendants to
In Re Best Buy Company, Inc. Securities Litigation, the file a Motion to Dismiss. Based on our information and
purported consolidated class action lawsuit that sought belief, the claims against the named officer and director
compensatory damages, costs and expenses on behalf of defendants are without merit and, if necessary, will be
persons who purchased our securities between January 9, vigorously defended.
2002, and August 7, 2002. The lawsuit alleged that the
defendants, Best Buy Co., Inc., and our Chairman, our We are involved in various other legal proceedings
two Vice Chairmen (including our Vice Chairman and arising in the normal course of conducting business. The
Chief Executive Officer) and our Chief Financial Officer, resolution of those proceedings is not expected to have a
violated Sections 10(b) and 20(a) of the Exchange Act, material impact on our results of operations or financial
and Rule 10b-5 promulgated thereunder, by making condition.
material misrepresentations between January 9, 2002,
15