SkyWest Airlines 2010 Annual Report Download - page 41

motion to consolidate the Texas State Actions into Case No. 2010-48784 in the first-filed court (the
‘‘189th District Court). On August 20, 2010, plaintiffs Levine, Tejeda, Doraiswamy and Swanepoel filed
a similar motion in the 189th District Court. On September 10, 2010, the 189th District Court ordered
the consolidation of the Texas State Actions with and into Case No. 2010-48784 (the consolidated
action is referred to herein as the ‘‘Consolidated Texas State Action’’).
On September 20, 2010, a putative stockholder class action (the ‘‘Texas Federal Action’’ and,
together with the Consolidated Texas State Action, the ‘‘Actions’’) was commenced in the United States
District Court for the Southern District of Texas, Houston Division. The complaint filed in the Texas
Federal Action includes substantially identical allegations to and requests substantially the same relief
as the petitions in the Texas State Actions, but also includes allegations related to the ExpressJet
Holdings preliminary proxy statement filed with the U. S. Securities and Exchange Commission on
September 3, 2010.
On October 8, 2010, counsel for the defendants in the Actions, counsel for the plaintiff class in the
Consolidated Texas State Action and counsel for plaintiff in the Texas Federal Action agreed to and
executed a memorandum of understanding (the ‘‘MOU’’) containing the terms of an agreement in
principle to resolve the Actions. The MOU provides that, in consideration for the settlement of the
Actions, ExpressJet Holdings made certain disclosures in the definitive proxy statement that was sent to
the ExpressJet Holdings stockholders soliciting approval of the ExpressJet Merger. In the MOU, the
defendants in the Actions acknowledge that they considered the claims raised by the plaintiffs in the
Actions in connection with the disclosures contemplated by the MOU. In exchange, the parties to the
MOU have agreed to use their best efforts to draft and execute a definitive stipulation of settlement
that includes a plaintiff class consisting of all record and beneficial holders of ExpressJet Holdings
stock, other than defendants in the Consolidated Texas State Action and any firm, trust, corporation or
other entity controlled by any such defendant, during the period beginning on and including
December 2, 2009, through and including the date of the consummation of the ExpressJet Merger. The
court has scheduled a hearing for April 14, 2011 to consider whether the negotiated settlement should
be approved. If approved by the parties and the 189th District Court, the settlement will result in the
dismissal with prejudice of the Consolidated Texas State Action and release by the plaintiff class of all
claims under federal and state law that were or could have been asserted in the Actions or which arise
out of or relate to the transactions contemplated by the ExpressJet Merger. The MOU further provides
that, in the event the Consolidated Texas State Action is dismissed in accordance with the settlement
stipulation, the parties to the MOU will use their best efforts to obtain the dismissal with prejudice of
the Texas Federal Action. The settlement of the Consolidated Texas State Actions is subject to
numerous conditions set forth in the MOU and to be contained in any stipulation of settlement,
including the completion of the ExpressJet Merger.
For financial reporting purposes we accrue an estimated loss if the loss is probable and reasonably
estimable. Because these conditions have not been satisfied, we did not record a loss related to the
preceding matter as of December 31, 2010.
ITEM 4. REMOVED AND RESERVED
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