Dollar Rent A Car 2011 Annual Report Download - page 84

Additionally, the Company has implemented drivers’ license validation procedures and requires examinations under oath in order to reduce the risk of
fraud and personal injury claims in certain markets.
The accrual for Vehicle Insurance Reserves includes amounts for incurred and incurred but not reported losses. Such liabilities are based on actuarially
determined estimates and management believes that the amounts accrued are adequate. At December 31, 2011 and 2010, the public liability and
property damage amounts have been discounted at 0.4% and 1.0% (assumed risk free rate), respectively, based upon the actuarially determined
estimated timing of payments to be made in future years. Discounting resulted in reducing the accrual for public liability and property damage by $0.4
million and $1.3 million at December 31, 2011 and 2010, respectively. SLI amounts are not discounted. Estimated future payments of Vehicle
Insurance Reserves as of December 31, 2011 are as follows (in thousands):
2012 $ 21,220
2013 15,314
2014 7,037
2015 4,617
2016 2,995
Thereafter 3,508
Aggregate undiscounted public liability and property damage 54,691
Effect of discounting (375)
Public liability and property damage, net of discount 54,316
Supplemental liability insurance 32,199
Total vehicle insurance reserves $ 86,515
Contingencies
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.
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