Hertz 2007 Annual Report Download - page 175

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
consolidated class action complaint. The plaintiffs have not yet filed the consolidated
complaint.
We believe that we have meritorious defenses in the foregoing matters and will defend ourselves
vigorously.
In addition, we are currently a defendant in numerous actions and have received numerous claims on
which actions have not yet been commenced for public liability and property damage arising from the
operation of motor vehicles and equipment rented from us and our licensees. In the aggregate, we can
be expected to expend material sums to defend and settle public liability and property damage actions
and claims or to pay judgments resulting from them.
On February 19, 2007, The Hertz Corporation and TSD Rental LLC v. Enterprise Rent-A-Car Company and
The Crawford Group, Inc. was filed in the United States District Court for the District of Massachusetts. In
this action, we and our co-plaintiff seek damages and injunctive relief based upon allegations that
Enterprise and its corporate parent, The Crawford Group, Inc., unlawfully engaged in anticompetitive
and unfair and deceptive business practices by claiming to customers of Hertz that once Enterprise
obtains a patent that it has applied for relating to its insurance replacement reservation system, Hertz will
be prevented from using the co-plaintiff’s EDiCAR system, which Hertz currently uses in its insurance
replacement business. The complaint alleges, among other things, that Enterprise’s threats are
improper because the Enterprise patent, once issued, should be invalid and unenforceable. In April
2007, Enterprise and Crawford filed a motion to dismiss and Hertz and TSD filed opposition papers in
May 2007. After a hearing on Enterprise’s motion in September 2007, Hertz and TSD filed an amended
complaint in October 2007.
On September 25, 2007, we filed a second lawsuit, also captioned The Hertz Corporation and TSD
Rental LLC v. Enterprise Rent-A-Car Company and The Crawford Group, Inc. in the United States District
Court for the District of Massachusetts. In this second lawsuit—the patent action—we seek a declaratory
judgment that a newly issued patent to The Crawford Group, Inc. is not infringed by Hertz and is invalid
and unenforceable. In October 2007, we filed a motion to consolidate the antitrust action and the patent
action and, in November 2007, the court granted our motion to consolidate the two actions. Enterprise
and Crawford filed a motion to dismiss the patent action in December 2007 and Hertz and TSD filed
opposition papers in January 2008. See ‘‘Part I—Item 1A—Risk Factors—Claims that the software
products and information systems that we rely on are infringing on the intellectual property rights of
others could increase our expenses or inhibit us from offering certain services, which could adversely
affect our results of operations’’ included elsewhere in this Report.
In addition to the foregoing, various legal actions, claims and governmental inquiries and proceedings
are pending or may be instituted or asserted in the future against us and our subsidiaries. Litigation is
subject to many uncertainties, and the outcome of the individual litigated matters is not predictable with
assurance. It is possible that certain of the actions, claims, inquiries or proceedings, including those
discussed above, could be decided unfavorably to us or any of our subsidiaries involved. Although the
amount of liability with respect to these matters cannot be ascertained, potential liability in excess of
related accruals is not expected to materially affect our consolidated financial position, results of
operations or cash flows, but it could be material in the period in which it is recorded.
Guarantees
At December 31, 2007, the following guarantees (including indemnification commitments) were issued
and outstanding.
155