MoneyGram 2008 Annual Report Download - page 138

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Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
lease incentives received under certain leases are recorded as deferred rent when the incentive is received and amortized as a reduction to
rent over the term of the lease using the straight-line method. Incentives received relating to tenant improvements are capitalized as
leasehold improvements and depreciated over the remaining term of the lease. At December 31, 2008, the deferred rent liability relating
to these incentives was $2.9 million.
Rent expense under these operating leases totaled $12.7 million, $11.4 million and $7.8 million during 2008, 2007 and 2006,
respectively. Minimum future rental payments for all noncancelable operating leases with an initial term of more than one year are
(amounts in thousands):
2009 $ 10,536
2010 9,163
2011 8,212
2012 5,018
2013 4,007
Later 7,574
Total $ 44,510
Legal proceedings — We are party to a variety of legal proceedings, including those that arise in the normal course of our business. All
legal proceedings are subject to uncertainties and outcomes that are not predictable with assurance. We accrue for legal proceedings as
losses become probable and can be reasonably estimated. Significant legal proceedings arising outside the normal course of our business
are described below. While the results of these proceedings cannot be predicted with certainty, management believes that after final
disposition, any monetary liability will not be material to our financial position. Further, the Company maintains insurance coverage for
many of the claims alleged.
Federal Securities Class Actions — The Company and certain of its officers and directors are parties to four class action cases in the
United States District Court for the District of Minnesota. In July 2008, the four cases were consolidated into one case captioned In re
MoneyGram International, Inc. Securities Litigation. The Consolidated Complaint was filed on October 3, 2008, and alleges against each
defendant violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 10b-5 under
the Exchange Act and alleges against Company officers violations of Section 20(a) of the Exchange Act. The Consolidated Complaint
alleges failure to adequately disclose, in a timely manner, the nature and risks of the Company's investments, as well as unrealized losses
and other-than-temporary impairments related to certain of the Company's investments. The complainant seeks recovery of losses
incurred by stockholder class members in connection with their purchases of the Company's securities.
ERISA Class Action — On April 22, 2008, Delilah Morrison, on behalf of herself and all other MoneyGram 401(k) Plan participants,
brought an action in the United States District Court for the District of Minnesota. The complaint alleges claims under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), including claims that the defendants breached fiduciary duties by
failing to manage the plan's investment in Company stock, and by continuing to offer Company stock as an investment option when the
stock was no longer a prudent investment. The complaint also alleges that defendants failed to provide complete and accurate information
regarding Company stock sufficient to advise plan participants of the risks involved with investing in Company stock and breached
fiduciary duties by failing to avoid conflicts of interests and to properly monitor the performance of plan fiduciaries and fiduciary
appointees. Finally, the complaint alleges that to the extent that the Company is not a fiduciary, it is liable for knowingly participating in
the fiduciary breaches as alleged. On August 7, plaintiff amended the complaint to add an additional plaintiff, name additional defendants
and additional allegations. For relief, the complaint seeks damages based on what the most profitable alternatives to Company stock
would have yielded, unspecified equitable relief, costs and attorneys' fees.
F-52