HR Block 2006 Annual Report Download - page 93
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service awards to the representative plaintiffs. In addition, we will pay We are named as a defendant in one other class-action lawsuit and
costs for providing notice of the settlement to settlement class one state attorney general lawsuit alleging that we engaged in
members. We increased existing reserves related to this matter, wrongdoing with respect to the RAL program. We believe we have
resulting in a pretax charge of $50.7 million in fiscal year 2006. strong defenses to the other lawsuits and will vigorously defend our
On April 19, 2006, we entered into a settlement agreement, subject to position. Nevertheless, the amounts claimed in these lawsuits are, in
final court approval, regarding litigation entitled Lynne A. Carnegie, et al. some instances, very substantial, and there can be no assurances as to
v. Household International, Inc., H&R Block, Inc., et al. (the ‘‘Carnegie their ultimate outcome, or as to their impact on our financial
Settlement Agreement’’). Pursuant to the Carnegie Settlement Agreement, statements. See additional discussion of RAL Litigation in Item 8,
we will contribute a total of $19.5 million in cash for purposes of making note 17 to the consolidated financial statements and in Part I, Item 3,
payments to the settlement class, paying all attorneys’ fees and costs to ‘‘Legal Proceedings.’’
class counsel, incentive payment awards to plaintiff and all notice and
administration costs. We recorded a reserve of $19.5 million related to
this settlement in the third quarter of fiscal year 2006.
H&R BLOCK 2006 Form 10K
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