Lumber Liquidators 2012 Annual Report Download - page 27

Item 2. Properties.
As of February 18, 2013, we operated 291 stores located in 46 states and Canada, including three opened since
December 31, 2012. In addition to our nine stores in Ontario, Canada, the table below sets forth the locations (alphabetically
by state) of our 282 U.S. stores in operation as of February 18, 2013.
State Stores State Stores State Stores State Stores
Alabama ......... 5 Iowa ............ 3 Nevada ............... 2 Rhode Island ........... 1
Arizona .......... 5 Kansas .......... 3 NewHampshire ........ 4 South Carolina ......... 4
Arkansas ......... 2 Kentucky ........ 4 NewJersey ............ 8 South Dakota .......... 1
California ........ 27 Louisiana ........ 5 NewMexico ........... 1 Tennessee ............. 6
Colorado ......... 6 Maine ........... 3 NewYork ............. 15 Texas ................. 22
Connecticut ....... 5 Maryland ........ 5 North Carolina ......... 10 Utah ................. 2
Delaware ......... 3 Massachusetts .... 7 North Dakota .......... 1 Vermont .............. 1
Florida ........... 19 Michigan ........ 8 Ohio ................. 10 Virginia ............... 11
Georgia .......... 9 Minnesota ....... 5 Oklahoma ............. 2 Washington ............ 7
Idaho ............ 2 Mississippi ....... 2 Oregon ............... 2 West Virginia .......... 3
Illinois ........... 11 Missouri ......... 5 Pennsylvania ........... 13 Wisconsin ............. 4
Indiana .......... 6 Nebraska ........ 2
We lease all of our stores and our corporate headquarters located in Toano, Virginia, which includes our call center,
corporate offices, and distribution and finishing facility. Our corporate headquarters has 307,784 square feet, of which
approximately 32,000 square feet are office space, and is located on a 74-acre plot. In addition, we lease 603,661 square feet
near the port in the Hampton Roads area in Virginia as our primary distribution facilities.
As of February 18, 2013, 28 of our store locations are leased from related parties. See discussion of properties leased
from related parties in Note 6 to the consolidated financial statements included in Item 8 of this report and within Certain
Relationships and Related Transactions, and Director Independence in Item 13 of this report.
Item 3. Legal Proceedings.
On May 21, 2012, Harbor Freight Tools USA, Inc. and Central Purchasing, LLC (together, the “Plaintiffs”) filed an
action, which was subsequently amended, in the Superior Court for the County of Los Angeles, California against us and
certain purported employees of ours (the “State Court Action”). In the State Court Action, the Plaintiffs contended that they
previously employed several individuals now working for us, and alleged, among other claims, the improper use and
possession by us and/or our employees of trade secrets belonging to the Plaintiffs and unfair business practices. The Plaintiffs
have sought unspecified monetary damages, punitive damages, injunctive, equitable and other relief.
On December 18, 2012, the Plaintiffs filed suit against us in the United States District Court for the Central District of
California. In that suit, in addition to the claims raised as in the State Court Action, the Plaintiffs alleged that we violated
certain of the Plaintiffs’ copyrights. The Plaintiffs have sought, among other things, a preliminary injunction precluding us
from using the Plaintiffs’ purported confidential information and selling seven specific tool products. The Plaintiffs
dismissed the State Court Action as it pertained to us but it remains pending as to the individual employees.
We strongly dispute the Plaintiffs’ contentions and have been litigating this matter aggressively. Nevertheless, the
parties engaged in settlement processes and have reached a tentative understanding on certain matters. We cannot, however,
make any assurance that this matter will ultimately settle. In the event that a settlement is not consummated, we will continue
to defend this matter vigorously and believe that the ultimate outcome of the litigation will not have a material adverse effect
on our results of operations, financial position or cash flows. Based upon the proceedings to date, we have recorded an
accrual of approximately $0.5 million in the fourth quarter of 2012 as our best estimate of the probable loss at this time.
On August 30, 2012, Jaroslaw Prusak, a purported customer (“Prusak”), filed a putative class action lawsuit against us
in the United States District Court for the Northern District of Illinois. Prusak alleges that we willfully violated the Fair and
Accurate Credit Transactions Act (“FACTA”) amendment to the Fair Credit Reporting Act in connection with printed credit
card receipts provided to our customers. Prusak, for himself and the putative class, seeks statutory damages of no less than
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