Hertz 2011 Annual Report Download - page 160

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(6) Represents an allowance for uncollectible program car receivables related to a bankrupt European dealer affiliated
with a U.S. car manufacturer.
(7) Represents a gain for the U.K. pension plan relating to unamortized prior service cost from a 2010 amendment that
eliminated discretionary pension increases related to pre-1997 service primarily pertaining to inactive employees.
(8) Represents premiums paid to redeem our 10.5% Senior Subordinated Notes and a portion of our 8.875% Senior
Notes.
Note 11—Contingencies and Off-Balance Sheet Commitments
Legal Proceedings
From time to time we are a party to various legal proceedings. Other than with respect to the aggregate
claims for public liability and property damage pending against us, management does not believe that
any of the matters resolved, or pending against us, during 2011 are material to us and our subsidiaries
taken as a whole. While we have accrued a liability with respect to claims for public liability and property
damage of $281.5 million at December 31, 2011, management, based on the advice of legal counsel,
does not believe any of the other pending matters described below are material. We have summarized
below, for purposes of providing background, various legal proceedings to which we were and/or are a
party during 2011 or the period after December 31, 2011 but before the filing of this Annual Report. In
addition to the following, various other legal actions, claims and governmental inquiries and
proceedings are pending or may be instituted or asserted in the future against us and our subsidiaries. In
particular, on June 15, 2011 we received a subpoena from the staff of the Securities and Exchange
Commission, or ‘‘SEC,’’ seeking production of documents related to our proposed business
combination with Dollar Thrifty Automotive Group, Inc. We intend to cooperate fully with the SEC’s
investigation. We do not expect this investigation to have any effect on our proposed business
combination with Dollar Thrifty.
1. Hertz Equipment Rental Corporation, or ‘‘HERC,’’ Loss Damage Waiver
On August 15, 2006, Davis Landscape, Ltd., individually and on behalf of all others similarly
situated, filed a complaint against HERC in the United States District Court for the District of
New Jersey. In November 2006, the complaint was amended to add another plaintiff, Miguel V.
Pro, and more claims. The Davis Landscape matter purports to be a nationwide class action on
behalf of all persons and business entities who rented equipment from HERC and who paid a
Loss Damage Waiver, or ‘‘LDW,’’ or an Environmental Recovery Fee, or ‘‘ERF.’’ The plaintiffs
seek a declaratory judgment and injunction prohibiting HERC from engaging in acts with
respect to the LDW and ERF charges that violate the New Jersey Consumer Fraud Act and
claim that the charges violate the Uniform Commercial Code. The plaintiffs also seek an
unspecified amount of compensatory damages with the return of all LDW and ERF charges
paid, attorneys’ fees and costs as well as other damages. The court has granted class
certification, denied our motion for summary judgment and the case is in the discovery stages.
2. Concession Fee Recoveries
On October 13, 2006, Janet Sobel, Daniel Dugan, PhD. and Lydia Lee, individually and on
behalf of all others similarly situated v. The Hertz Corporation and Enterprise Rent-A-Car
Company, or ‘‘Enterprise,’’ was filed in the United States District Court for the District of Nevada.
The plaintiffs agreed to not pursue claims against Enterprise initially and the case only
proceeded against Hertz. The Sobel case purports to be a nationwide class action on behalf of
all persons who rented cars from Hertz at airports in Nevada and were separately charged
airport concession recovery fees by Hertz as part of their rental charges. The plaintiffs seek an
134