Classmates.com 2007 Annual Report Download - page 33

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July 27, 2006, plaintiff Donald E. Ewart filed a purported consumer class action lawsuit in the Superior Court of the State of California, County
of Los Angeles, against NetZero containing substantially similar allegations to the Piercy case. Plaintiffs in both cases are seeking injunctive and
declaratory relief and damages. NetZero filed a response to both lawsuits denying the material allegations of the complaints. Both Messrs. Piercy
and Ewart subsequently withdrew from the actions as class representatives. On March 16, 2007, Barbara Rasnake and Robert Du Verger were
substituted as purported class representatives. On May 25, 2007, the court consolidated the actions under the caption Rasnake v. NetZero, Inc.,
Case No. BC348461. On June 13, 2007, Peter Chrisler was substituted as a purported class representative. On July 13, 2007, the plaintiffs filed a
consolidated amended class action complaint. A trial date has not yet been set.
The pending lawsuits involve complex questions of fact and law and may require the expenditure of significant funds and the diversion of
other resources to defend. Although we do not believe the outcome of the above outstanding legal proceedings, claims and litigation will have a
material adverse effect on our business, financial position, results of operations or cash flows, the results of litigation are inherently uncertain
and we cannot assure you that we will not be materially and adversely impacted by the results of such proceedings. At December 31, 2007, we
had not established allowances for losses relating to any of the matters described above, with the exception of the Rasnake v. NetZero matter.
We are subject to various other legal proceedings and claims that arise in the ordinary course of business. We believe the amount, and
ultimate liability, if any, with respect to these actions will not materially affect our business, financial position, results of operations or cash
flows. We cannot assure you, however, that such actions will not materially and adversely affect our business, financial position, results of
operations or cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
We did not submit any matters to a vote of security holders during the quarter ended December 31, 2007.
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