Dollar Rent A Car 2011 Annual Report Download - page 27

On September 22, 2009, a purported class action complaint was filed in Illinois state court by Susan and Jeffrey Dillon, individually and on behalf of all
persons who rented a vehicle from Thrifty Car Rental in Colorado from September 22, 2006 forward, who signed a rental agreement which obligated them to
pay for loss of use of a vehicle if damaged, and who were charged for loss of use or an administrative fee related to the vehicle damage claim. Plaintiffs assert
claims for breach of contract, violations of the Colorado Consumer Protection Act and for declaratory judgment under the Colorado Uniform
Declaratory Judgment Law related to the assessment of loss of use and administrative fees in connection with vehicle damage claims against renters. The case
is styled: 
. On July 23, 2010, these actions were dismissed with prejudice. The plaintiffs filed their notice of appeal on August 19, 2010. Appellate
briefing was completed on May 16, 2011 and oral argument on the appeal occurred on December 6, 2011, and the parties are awaiting a ruling.
Various class action complaints relating to the now terminated proposed merger transaction with Hertz Global Holdings, Inc. (“Hertz”) have been filed in
Oklahoma state court, Oklahoma federal court, and Delaware Chancery Court against the Company, its directors, and Hertz by various plaintiffs, for
themselves and on behalf of the Company's stockholders, excluding defendants and their affiliates. These complaints allege that the consideration the
Company's stockholders would have received in connection with the proposed transaction with Hertz is inadequate and that the Company's directors breached
their fiduciary duties to stockholders in negotiating and approving the merger agreement. These complaints also allege that the proxy materials that were sent to
the Company's stockholders to approve the merger agreement are materially false and misleading. The cases and their current status are as follows: 1) Henzel
v. Dollar Thrifty Automotive Group, Inc., et al. (Consolidated Case No. CJ-2010-02761, Dist. Ct. Tulsa County, Oklahoma) - this case has not been
dismissed but is currently inactive and 2) In Re: Dollar Thrifty Shareholder Litigation (Consolidated Case No. 5458-VCS, Delaware Court of Chancery) - on
October 18, 2011, plaintiffs sought permission to amend their pleadings to assert additional claims that members of the Company’s board of directors (the
“Board”) breached their fiduciary duties concerning the following matters: (a) the Board’s response to a merger proposal by Avis Budget Group, Inc. (“Avis
Budget”) in September, 2010; (b) the Board’s use of defensive measures, including the adoption of a poison pill, in response to the Exchange Offer made by
Hertz; (c) the Board’s response to the failure of Hertz to submit an improved final offer meeting certain Board criteria by October 10, 2011; and (d) the
Board’s alleged failure to make full material disclosures to the Company’s stockholders concerning the Hertz offer, the Company’s stand-alone plan, and the
Company’s negotiations with Hertz regarding a business combination. The court has not ruled on the plaintiffs’ request to amend. On November 1, 2011,
the plaintiffs advised the court that the parties have agreed to stay further activity pending the outcome of the Hertz antitrust review process.
Given the inherent uncertainties of litigation, the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of ultimate loss, if any,
be reasonably estimated.
Various other legal actions, claims and governmental inquiries and proceedings have been in the past, or may be in the future, asserted or instituted against the
Company, including other purported class actions or proceedings relating to the Hertz transaction terminated in October 2010 or a potential acquisition
transaction, and some that may demand large monetary damages or other relief which could result in significant expenditures. Litigation is subject to many
uncertainties and is inherently unpredictable. The Company is also subject to potential liability related to environmental matters. The Company establishes
reserves for litigation and environmental matters when the loss is probable and reasonably estimable. It is reasonably possible that the final resolution of some
of these matters may require the Company to make expenditures in excess of established reserves. The term “reasonably possible” is used herein to mean that
the chance of a future transaction or event occurring is more than remote but less than probable. Disclosure for specific legal contingencies is provided if the
likelihood of occurrence is at least reasonably possible and the exposure is considered material to the consolidated financial statements. The
Company evaluates developments in its legal matters that could affect the amount of previously accrued reserves and makes adjustments as
appropriate. Significant judgment is required to determine both likelihood of a further loss and the estimated amount of the loss.
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