Pizza Hut 2008 Annual Report Download - page 226

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We have provided for the estimated costs of these claims and litigation, based on a projection of potential claims and their
amounts as well as the results of settlement negotiations in similar matters. But in view of the inherent uncertainties of
litigation, there can be no assurance that the outcome of the litigation will not result in losses in excess of those currently
provided for in our Consolidated Financial Statements.
On March 14, 2007, a lawsuit styled Boskovich Farms, Inc. v. Taco Bell Corp. and Does 1 through 100 was filed in the
Superior Court of the State of California, Orange County. Boskovich Farms, a supplier of produce to Taco Bell, alleges in
its Complaint, among other things, that it suffered damage to its reputation and business as a result of publications and/or
statements it claims were made by Taco Bell in connection with Taco Bell’s reporting of results of certain tests conducted
during investigations on green onions used at Taco Bell restaurants. The Company believes that the Complaint should
properly be heard in an alternative dispute resolution (“ADR”) forum according to the contractual terms governing the
relationship of the parties. The Company filed a motion to compel ADR and stay the litigation on May 1, 2007. The
Court entered an order granting this motion on June 14, 2007. Boskovich filed a writ petition to set aside the trial court’s
ruling compelling ADR; the writ petition was denied in October 2007. The parties participated in mediation on April 10,
2008, without reaching resolution. An arbitration panel has been selected, and the arbitration is currently scheduled for
September, 2009. The Company denies liability and intends to vigorously defend against all claims in any arbitration and
the lawsuit. However, in view of the inherent uncertainties of litigation, the outcome of this case cannot be predicted at
this time. Likewise, the amount of any potential loss cannot be reasonably estimated.
Form 10-K