Hertz 2014 Annual Report Download - page 171

Table of Contents
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of the purported class and an award of costs and expenses, including counsel fees and expert fees. In June 2014, Hertz Holdings
responded to the amended complaint by filing a motion to dismiss. In August 2014, the plaintiffs filed their opposition to Hertz Holdings'
motion to dismiss and also filed a motion to strike certain exhibits which were included in Hertz Holdings' motion to dismiss. After a
hearing in October 2014, the court granted Hertz Holdings' motion to dismiss the complaint. The dismissal was without prejudice and
plaintiff was granted leave to file a second amended complaint within 30 days of the order. The motion to strike was dismissed as moot. In
November 2014, plaintiffs filed an amended complaint which shortened the putative class period such that it is not alleged to have
commenced until May 18, 2013 and makes allegations that are substantively similar to the allegations in the prior complaint. In early 2015,
this case was assigned to a new federal judge in the District of New Jersey. Plaintiffs filed their opposition to Hertz Holdings' motion to
dismiss in January 2015. In February 2015, Hertz Holdings filed its reply to Plaintiffs’ opposition. Hertz Holdings believes that it has valid
and meritorious defenses and it intends to vigorously defend against these allegations, but litigation is subject to many uncertainties and
the outcome of this matter is not predictable with assurance. It is possible that this matter could be decided unfavorably to Hertz Holdings,
however, Hertz Holdings is currently unable to estimate the range of these possible losses, but they could be material.
The Company intends to assert that it has meritorious defenses in the foregoing matters and the Company intends to defend itself vigorously.
- In June 2014 the Company was advised by the staff of the New York Regional Office of the Securities and
Exchange Commission (the “SEC”) that it is investigating the events disclosed in certain of the Company’s filings with the SEC. In
addition, in December 2014 a state securities regulator requested information regarding the same events. The investigations generally
involve the restatements described in this report and related accounting for prior periods. The Company has and intends to continue to
cooperate with both the SEC and state requests. Due to the stage at which the proceedings are, Hertz is currently unable to predict the
likely outcome of the proceedings or estimate the range of reasonably possible losses, which may be material.
The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated. Other
than the aggregate reserve established for claims for public liability and property damage, none of those reserves are material. For matters,
including certain of those described above, where the Company has not established a reserve, the ultimate outcome or resolution cannot be
predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. 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 the Company or any of its subsidiaries involved. Accordingly, it is
possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's
consolidated financial condition, results of operations or cash flows in any particular reporting period.
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In the ordinary course of business, the Company executed contracts involving indemnification obligations customary in the relevant industry and
indemnifications specific to a transaction such as the sale of a business. These indemnification obligations might include claims relating to the
following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and
other commercial contractual relationships; and financial matters. Specifically, the Company has indemnified various parties for the costs
associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for
natural resource damages. The amount of any such expenses or related natural resource damages for which the Company may be held
responsible could be substantial. In addition, Hertz has entered into customary indemnification agreements with Hertz Holdings, the Sponsors and
its stockholders affiliated with the Sponsors, pursuant to which Hertz Holdings and Hertz will indemnify the Sponsors, its stockholders affiliated
with the Sponsors and their respective affiliates, directors, officers, partners, members, employees, agents, representatives and controlling
persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of the Sponsors and certain
other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. The Company has also entered into
customary indemnification agreements with each of its directors. Performance under these indemnification obligations would generally be triggered
by a breach of terms of
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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