Lumber Liquidators 2009 Annual Report Download - page 26

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As of February 17, 2010, 26 of our store locations are leased from related parties. See discussion of properties leased
from related parties in Note 5 to the consolidated financial statements included in Item 8 of this report and within Certain
Relationships, Related Transactions and Director Independence in Item 13 of this report.
Item 3. Legal Proceedings.
On September 3, 2009, a former store manager and a current assistant store manager (together, the “Plaintiffs”) filed a
putative class action suit against Lumber Liquidators, Inc. (“LLI”) in the Superior Court of California in and for the County
of Alameda. The Plaintiffs allege that with regard to certain groups of current and former employees in LLI’s California
stores, LLI violated California law by failing to calculate and pay overtime wages properly, provide meal breaks, compensate
for unused vacation time, reimburse for certain expenses and maintain required employment records. The Plaintiffs also
claim that LLI did not calculate and pay overtime wages properly for certain of LLI’s non-exempt employees, both in and out
of California, in violation of federal law. In their suit, the Plaintiffs seek compensatory damages, certain statutory penalties,
costs, attorney’s fees and injunctive relief. LLI removed the case to the United States District Court for the Northern District
of California. LLI intends to defend the claims in this suit vigorously. While there is a reasonable possibility that a material
loss may be incurred, the Company cannot estimate the loss or range of loss, if any, to the Company at this time.
We are, from time to time, subject to claims and disputes arising in the normal course of business. In the opinion of
management, while the outcome of any such claims and disputes cannot be predicted with certainty, our ultimate liability in
connection with these matters is not expected to have a material adverse effect on our results of operations, financial position
or cash flows.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of our security holders during the fourth quarter of 2009.
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