PNC Bank 2011 Annual Report Download - page 199

among others, one or more of the following: the proceeding is
in its early stages; the damages sought are unspecified,
unsupported or uncertain; it is unclear whether a case brought
as a class action will be allowed to proceed on that basis or, if
permitted to proceed as a class action, how the class will be
defined; the plaintiff is seeking relief other than or in addition
to compensatory damages; the matter presents meaningful
legal uncertainties, including novel issues of law; we have not
engaged in meaningful settlement discussions; discovery has
not started or is not complete; there are significant facts in
dispute; and there are a large number of parties named as
defendants (including where it is uncertain how liability, if
any, will be shared among multiple defendants). Generally,
the less progress that has been made in the proceedings or the
broader the range of potential results, the harder it is for us to
estimate losses or ranges of losses that it is reasonably
possible we could incur. Therefore, as the estimated aggregate
amount disclosed above does not include all of the Disclosed
Matters, the amount disclosed above does not represent our
maximum reasonably possible loss exposure for all of the
Disclosed Matters. The estimated aggregate amount also does
not reflect any of our exposure to matters not so disclosed, as
discussed below under “Other.”
We include in some of the descriptions of individual
Disclosed Matters certain quantitative information related to
the plaintiff’s claim against us alleged in the plaintiff’s
pleadings or otherwise publicly available. While information
of this type may provide insight into the potential magnitude
of a matter, it does not necessarily represent our estimate of
reasonably possible loss or our judgment as to any currently
appropriate accrual.
Some of our exposure in Disclosed Matters may be offset by
applicable insurance coverage. We do not consider the
possible availability of insurance coverage in determining the
amounts of any accruals (although we record the amount of
related insurance recoveries that are deemed probable up to
the amount of the accrual) or in determining any estimates of
possible losses or ranges of possible losses.
Securities and State Law Fiduciary Cases against National
City
• In January 2008, a lawsuit (In re National City
Corporation Securities, Derivative & ERISA
Litigation (The Securities Case) (MDL No. 2003,
Case No: 1:08-nc-70004-SO)) was filed in the United
States District Court for the Northern District of Ohio
against National City and certain officers and
directors of National City. As amended, this lawsuit
was brought as a class action on behalf of purchasers
of National City’s stock during the period April 30,
2007 to April 21, 2008 and also on behalf of
everyone who acquired National City stock pursuant
to a registration statement filed in connection with its
acquisition of MAF Bancorp in 2007. The amended
complaint alleges violations of federal securities laws
regarding public statements and disclosures relating
to, among other things, the nature, quality,
performance, and risks of National City’s non-prime,
residential construction, and National Home Equity
portfolios, its loan loss reserves, its financial
condition, and related allegedly false and misleading
financial statements. In the amended complaint, the
plaintiffs seek, among other things, unspecified
damages and attorneys’ fees. A motion to dismiss the
amended complaint is pending. A magistrate judge
has recommended dismissal of the lawsuit without
prejudice, with a right for the plaintiffs to file a
further amended complaint within 30 days. The
magistrate’s recommendation is subject to adoption
by the district court. The plaintiffs have filed
objections to that recommendation. In August 2011,
the parties entered into a memorandum of
understanding providing for the settlement of the
lawsuit for $168 million and in November filed
formal settlement papers with the district court. The
settlement is conditioned on, among other things,
final court approval. The court has scheduled a
hearing in March 2012 to determine if it will grant
final approval to the settlement. As a result of
existing accruals and recorded probable insurance
recoveries, PNC expects the impact of this settlement
on our future results of operations to be immaterial.
• In May 2008, a lawsuit (The Dispatch Printing
Company, et al. v. National City Corporation, et al.
(Case No. 08CVH-6506)) was filed on behalf of an
individual plaintiff in the Franklin County, Ohio,
Court of Common Pleas against National City,
certain directors of National City, and Corsair
Co-Invest, L.P. and unnamed other investors
participating in the April 2008 capital infusion into
National City, alleging that National City’s directors
breached their fiduciary duties by entering into this
capital infusion transaction. A motion to dismiss the
case as originally filed was denied. After the initial
filing, two additional plaintiffs were added. The
plaintiffs filed an amended complaint in December
2010. The amended complaint adds PNC as a
defendant as successor in interest to National City. In
the amended complaint, which included some
additional allegations, the plaintiffs seek, among
other things, unspecified actual and punitive
damages, and attorneys’ fees. In December 2011, we
filed a motion for summary judgment. The court has
not yet ruled on this motion. The court has currently
scheduled the trial to begin in July 2012.
Interchange Litigation
Beginning in June 2005, a series of antitrust lawsuits were
filed against Visa®, MasterCard®, and several major financial
institutions, including cases naming National City (since
merged into PNC) and its subsidiary, National City Bank of
Kentucky (since merged into National City Bank which in
190 The PNC Financial Services Group, Inc. – Form 10-K