TiVo 2006 Annual Report Download - page 40

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underwriters, the Company's and the other issuer defendants' monetary obligations to the class plaintiffs will be satisfied. Furthermore, the settlement is
subject to a hearing on fairness and approval by the Federal District Court overseeing the IPO Litigation. On February 15, 2005, the Court issued an order
preliminarily approving the terms of the proposed settlement. The Court also certified the settlement classes and class representatives for purposes of the
proposed settlement only. On April 24, 2006, the Court held a fairness hearing to determine whether the proposed settlement should be approved. It is
possible that the Federal District Court may not provide final approval to the settlement in whole or part. On December 5, 2006, the United States Court of
Appeals for the 2nd Circuit issued a decision in In re: Initial Public Offering Securities Litigation (Docket No. 05-3349-cv), reversing the Federal District
Court's finding that six focus cases involved in this litigation could be certified as class actions. It is not yet clear what impact, if any, the decision may have
on the proposed settlement agreement. Plaintiffs have filed a petition for rehearing and/or for en banc review of the Second Circuit's decision, and the Federal
District Court has indicated that it will not make any decision regarding the proposed settlement until the Second Circuit decides whether it will consider a
rehearing. On January 24, 2007, the Second Circuit ordered the Underwriters to file a response on certain issues to Plaintiffs' request for a rehearing. In
accordance with Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies" the Company believes any contingent liability related to
this claim is not probable or estimable and therefore no amounts have been accrued in regards to this matter as of January 31, 2007.
It is not yet clear what impact, if any, the decision may have on the proposed settlement agreement. Plaintiffs filed a petition for rehearing and/or
for en banc review of the Second Circuit's decision, and the Federal District Court indicated that it would not make any decision regarding the proposed
settlement until the Second Circuit had decided whether to consider a rehearing. On April 6th, 2007, the Second Circuit denied plaintiffs' petition for
rehearing, but allowed that plaintiffs might ask the district court to certify a more limited class. In accordance with Statement of Financial Accounting
Standards No. 5, "Accounting for Contingencies" the Company believes any contingent liability related to this claim is not probable or estimable and
therefore no amounts have been accrued in regards to this matter as of January 31, 2007.
The Company is involved in numerous lawsuits in the ordinary course of its business. The Company assesses potential liabilities in connection
with these lawsuits under Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies." The Company accrues an estimated loss for
these loss contingencies if both of the following conditions are met: information available prior to issuance of the financial statements indicates that it is
probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. As of January 31, 2007,
the Company had accrued an immaterial liability amount for one of the lawsuits filed against it, no other lawsuits met the conditions for accrual. The
Company expenses legal costs as they are incurred.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the quarter ended January 31, 2007.
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