Hertz 2014 Annual Report Download - page 214

Table of Contents
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million shares of its common stock, paying cash premiums of approximately $12 million and incurring a loss on extinguishment of debt of $28
million which was recorded in "Other (income) expense, net."
In January 2014, another conversion right on its Convertible Senior Notes was triggered and in May 2014, substantially all of the Convertible Senior
Notes were exchanged for 10 million shares of its common stock. The Convertible Senior Notes that were not previously converted matured in
June 2014 and there are no longer any Convertible Senior Notes outstanding.
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In re Hertz Global Holdings, Inc. Securities Litigation
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 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 the Company's motion to dismiss and also
filed a motion to strike certain exhibits which were included in the Company's motion to dismiss. After a hearing in October 2014, the court granted
the Company's 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 the Company's 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.
Governmental Investigations
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.
For a discussion of the commitments and contingencies of the indirect subsidiaries of Hertz Holdings, see Note 11, "Lease and Concession
Agreements," and Note 14, "Contingencies and Off-Balance Sheet Commitments," to the Notes to its consolidated financial statements included in
this Annual Report under the caption “Item 8—Financial Statements and Supplementary Data.”
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During 2013 and 2012, Hertz Holdings received approximately $482 million and $25 million, respectively, of return of capital and cash dividends
from its subsidiaries for the purchase of stock and payment of interest related to the Convertible Senior Notes. There was no return of capital or
dividends received during 2014.
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Source: HERTZ GLOBAL HOLDINGS INC, 10-K, July 16, 2015 Powered by Morningstar® Document Research℠
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