Hertz 2014 Annual Report Download - page 170

Table of Contents
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Public Liability and Property Damage
The Company is currently a defendant in numerous actions and has 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 the Company. The obligation for
public liability and property damage on self-insured U.S. and international vehicles and equipment, as stated on the Company's balance sheet,
represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded
on a non-discounted basis. Reserve requirements are based on actuarial evaluations of historical accident claim experience and trends, as well as
future projections of ultimate losses, expenses, premiums and administrative costs. At December 31, 2014 and 2013, the Company's liability
recorded for public liability and property damage matters was $385 million and $351 million, respectively. The Company believes that its analysis
is based on the most relevant information available, combined with reasonable assumptions, and that the Company may prudently rely on this
information to determine the estimated liability. The Company notes that the liability is subject to significant uncertainties. The adequacy of the
liability reserve is regularly monitored based on evolving accident claim history and insurance related state legislation changes. If the Company's
estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.
Other Matters
From time to time the Company is a party to various legal proceedings. The Company has summarized below, the most significant legal
proceedings to which the Company was and/or is a party to during 2014 or the period after December 31, 2014 but before the filing of this Annual
Report.
  In October 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 U.S. District Court for the
District of Nevada (Enterprise became a defendant in a separate action which they have now settled.) The Sobel case is 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 unspecified amount of compensatory damages, restitution of
any charges found to be improper and an injunction prohibiting Hertz from quoting or charging those airport fees that are alleged not to be
allowed by Nevada law. The plaintiff also seeks attorneys' fees and costs. In 2010, the parties engaged in mediation which resulted in a
proposed settlement. Although the court tentatively approved the settlement in November 2010, the court denied the plaintiffs' motion for
final approval of the proposed settlement in May 2011. Following additional activity in the case, in March 2013, the court granted, in part,
the plaintiffs' motion for partial summary judgment with respect to restitution and granted the plaintiffs' motion for class certification while
denying the Company's motion for partial summary judgment. In October 2014, the court entered final judgment, merging all of its prior
rulings and directed Hertz to pay the class approximately $42 million in restitution and $11 million in prejudgment interest, and to pay
attorney's fees of $3.1 million with an additional $3.1 million to be paid from the restitution fund. In December 2014, Hertz timely filed an
appeal of that final judgment with the U.S. Court of Appeals for the Ninth Circuit and the plaintiffs cross appealed the court's judgment
seeking to challenge the lower court's ruling that Hertz did not deceive or mislead the class members. In April 2015, Hertz filed its opening
brief. In June 2015, the plaintiffs filed their answering brief and opening brief on their cross-appeal. The Company continues to believe the
outcome of this case will not be material to its financial condition, results of operations or cash flows.
        In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v.
Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Hertz Holdings and
certain of its officers as defendants and alleging violations of the federal securities laws. The complaint alleges that Hertz Holdings made
material misrepresentations and/or omissions of material fact in its public disclosures during the period from February 25, 2013 through
November 4, 2013, in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder. Plaintiffs seek an unspecified amount of monetary damages on behalf
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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