GNC 2009 Annual Report Download - page 106

Table of Contents
GENERAL NUTRITION CENTERS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
maintain GNC's favored position as a product wholesaler. Plaintiffs are seeking damages in an unspecified amount and equitable and injunctive
relief. On March 19, 2008, the court certified a class as to only plaintiffs' claim under the CBPC. The class consists of all persons or entities who
are or were GNC franchisees in the State of California from November 13, 2002 to the date of adjudication. Plaintiffs' other claims remain as
individual claims in this lawsuit. On March 18, 2009, the Company's motion for summary judgment was granted. The Company is vigorously
defending this matter. Any liabilities that may arise from this matter are not probable or reasonably estimable at this time.
Creatine Claim. On October 29, 2008, plaintiff S.K., on behalf of himself and all others similarly situated, filed a complaint against the
Company and General Nutrition Corporation in U.S. District Court, Southern District of New York. Plaintiff makes certain allegations regarding
consumption of GNC products containing creatine and GNC's alleged failure to warn consumers of those risks. Plaintiff asserts, among other
things, claims for deceptive sales practices, fraud, breach of implied contract, strict liability and related tort claims, and seeks unspecified
monetary damages. Any liabilities that may arise from this matter are not probable or reasonably estimable at this time.
Jackson Claim. On November 10, 2008, Grady Jackson, on behalf of himself and all others similarly situated, filed a Complaint against
General Nutrition Corporation and General Nutrition Centers, Inc. in California Superior Court for Alameda County. On December 15, 2008, the
matter was removed to the U.S. District Court, Northern District of California. This consumer class and representative action, brought under
California Unfair Competition and False Advertising Law asserts among other things, that the non-GNC product "Nikki Haskell's Star Caps"
contained a prescription diuretic ingredient that was not disclosed on the label. Any liabilities that may arise from this matter are not probable or
reasonably estimable at this time.
DiMauro Claim. On December 18, 2008, Plaintiffs Laura and Charles DiMauro filed a personal injury Complaint against General Nutrition
Corporation in Circuit Court for Dade County Florida. Plaintiffs allege that Laura DiMauro's use and consumption of a non-GNC product called
"Up Your Gas" resulted in liver failure that required a liver transplant in August 2007. Plaintiffs assert, among other things, claims for strict
liability, negligence, and fraud and seek unspecified monetary damages. Any liabilities that may arise from this matter are not probable or
reasonably estimable at this time.
Commitments
The Company maintains certain purchase commitments with various vendors to ensure its operational needs are fulfilled of approximately
$28.9 million. The future purchase commitments consisted of $13.6 million of advertising, inventory commitments and spending for website
redesign, $12.3 million management services agreement and bank fees and $3.0 million related to future litigation costs. Other commitments
related to the Company's business operations cover varying periods of time and are not significant. All of these commitments are expected to
be fulfilled with no adverse consequences to the Company's operations of financial condition.
Environmental Compliance
The South Carolina Department of Health and Environmental Control (DHEC) requested that the Company investigate the Company's South
Carolina facility for a possible source or sources of contamination detected on an adjoining property. The Company has commenced the
investigation at the facility as requested by DHEC and will continue such investigation in 2009. The proceedings in this matter have not yet
progressed to a stage where it is possible to estimate the timing and extent of any remedial action that may be required, the ultimate cost of
remediation, or the amount of its potential liability. 100