Big Lots 2008 Annual Report Download - page 136

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
meal periods, reimbursement of expenses, loss of unused vacation time, and attorneys’ fees and costs. The
court has not determined whether the case may proceed as a class action, and has not set any deadlines for class
certification or trial. We cannot make a determination as to the probability of a loss contingency resulting from
this lawsuit or the estimated range of possible loss, if any. We intend to vigorously defend ourselves against the
allegations levied in this lawsuit; however, the ultimate resolution of this matter could have a material adverse
effect on our financial condition, results of operations, and liquidity.
In February 2008, three alleged class action complaints were filed against us by a California resident (the
“Caron matters”). The first was filed in the Superior Court of California, Orange County. This action is similar
in nature to the Seals matter, which allowed us to successfully coordinate this matter with the Seals matter
in the Superior Court of California, Los Angeles County. The second and third matters, filed in the United
States District Court, Central District of California, and the Superior Court of California, Riverside County,
respectively, allege that we violated certain California wage and hour laws for missed meal and rest periods
and other wage and hour claims. The plaintiff seeks to recover, on her own behalf and on behalf of a California
statewide class of all other individuals who are similarly situated, damages resulting from improper wage
statements, missed rest breaks, missed meal periods, non-payment of wages at termination, reimbursement of
expenses, loss of unused vacation time, and attorneys’ fees and costs. We believed these two matters overlapped
and we successfully consolidated the two cases before one court. The remaining allegations also overlap some
portion of the claims released through the class action settlement in the Espinosa matter. We cannot make a
determination as to the probability of a loss contingency resulting from this lawsuit or the estimated range of
possible loss, if any. We intend to vigorously defend ourselves against the allegations levied in this lawsuit;
however, the ultimate resolution of this matter could have a material adverse effect on our financial condition,
results of operations, and liquidity.
In 1998, an action was filed against us in the District Court, 224th Judicial District, in Bexar County, Texas
(“State Court”) by a plaintiff claiming she was injured when she fell in one of our stores (“Rivera matter”). The
matter was removed to the United States District Court (“Federal Court”) and the claim was fully litigated.
Ultimately, the Federal Court granted a summary judgment in our favor in January 2000. The plaintiff re-
filed the same complaint in April 2000 in State Court and then obtained a default judgment against us on
June 20, 2000 in the amount of approximately $1.5 million plus post-judgment interest, which brings the total
claim against us to approximately $3.4 million. No effort was made to collect on this judgment by the plaintiff
until February 2009, when we were served with a Writ of Execution of Judgment. We have filed a petition
for a Bill of Review with the State Court. Since we are awaiting a decision from the State Court we cannot
make a determination as to the probability of a loss contingency resulting from the Rivera matter; however,
we currently believe that the Rivera matter will be resolved without material adverse effect on our financial
condition, results of operations, or liquidity.
We are involved in other legal actions and claims, including various additional employment-related matters,
arising in the ordinary course of business. We currently believe that such actions and claims, both individually
and in the aggregate, will be resolved without material adverse effect on our financial condition, results of
operations, or liquidity. However, litigation involves an element of uncertainty. Future developments could cause
these actions or claims to have a material adverse effect on our financial condition, results of operations, and
liquidity.
For a discussion of discontinued operations, including KB Toys matters, see note 11 to our accompanying
consolidated financial statements.
We are self-insured for certain losses relating to property, general liability, workers’ compensation, and employee
medical and dental benefit claims, a portion of which is paid by employees, and we have purchased stop-loss
coverage in order to limit significant exposure in these areas. Accrued insurance liabilities are actuarially
determined based on claims filed and estimates of claims incurred but not reported.
Note 10 — Commitments, Contingencies and Legal Proceedings (Continued)