U-Haul 2006 Annual Report Download - page 41

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AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Securities Litigation
AMERCO is a defendant in a consolidated putative class action lawsuit entitled “In Re AMERCO Securities
Litigation”, United States District Court, Case No. CV-N-03-0050-ECR (RAM). The action alleges claims for violation of
Section 10(b) of the Securities Exchange Act and Rule 10b-5 there under, section 20(a) of the Securities Exchange Act of
1934 and sections 11, 12, and 15 of the Securities Act of 1933. The action alleges, among other things, that AMERCO
engaged in transactions with the SAC entities that falsely improved AMERCO’ s financial statements and that AMERCO
failed to disclose the transactions properly. The action has been transferred to the United States District Court, District of
Arizona and assigned to Judge Bryan. Motions to Dismiss are fully briefed and are before the court. Prior to the ruling on
the Motions to Dismiss, the parties have agreed to a settlement in principle, subject to final documentation and approval by
the Court. The settlement in the amount of $5.0 million, will be covered by AMERCO’ s D&O insurance carrier.
Securities and Exchange Commission
The Securities and Exchange Commission (“SEC”) has issued a formal order of investigation to determine whether the
Company has violated the Federal Securities laws. The Company has produced and delivered all requested documents and
information and provided testimony from all requested witnesses to the SEC. The Company continues to cooperate with the
SEC. We cannot predict the outcome of the investigation.
Environmental
In the normal course of business, AMERCO is a defendant in a number of suits and claims. AMERCO is also a
party to several administrative proceedings arising from state and local provisions that regulate the removal and/or cleanup
of underground fuel storage tanks. It is the opinion of management, that none of these suits, claims or proceedings
involving AMERCO, individually or in the aggregate, are expected to result in a material loss.
Compliance with environmental requirements of federal, state and local governments significantly affects Real Estate’ s
business operations. Among other things, these requirements regulate the discharge of materials into the water, air and land
and govern the use and disposal of hazardous substances. Real Estate is aware of issues regarding hazardous substances on
some of its properties. Real Estate regularly makes capital and operating expenditures to stay in compliance with
environmental laws and has put in place a remedial plan at each site where it believes such a plan is necessary. Since 1988,
Real Estate has managed a testing and removal program for underground storage tanks.
Based upon the information currently available to Real Estate, compliance with the environmental laws and its share of
the costs of investigation and cleanup of known hazardous waste sites are not expected to have a material adverse effect on
AMERCO’ s financial position or operating results. Real Estate expects to spend approximately $7.6 million through 2011
to remediate these properties.
Other
The Company is named as a defendant in various other litigation and claims arising out of the normal course of
business. In managements’ opinion none of these other matters will have a material effect on the Company’ s financial
position and results of operations.
F-34