U-Haul 2006 Annual Report Download - page 96

Item 3. Legal Proceedings
Shoen
On September 24, 2002, Paul F. Shoen filed a derivative action in the Second Judicial District Court of the State
of Nevada, Washoe County, captioned Paul F. Shoen vs. SAC Holding Corporation et al., CV02-05602, seeking
damages and equitable relief on behalf of AMERCO from SAC Holdings and certain current and former members of
the AMERCO Board of Directors, including Edward J. Shoen, Mark V. Shoen and James P. Shoen as defendants.
AMERCO is named a nominal defendant for purposes of the derivative action. The complaint alleges breach of
fiduciary duty, self-dealing, usurpation of corporate opportunities, wrongful interference with prospective economic
advantage and unjust enrichment and seeks the unwinding of sales of self-storage properties by subsidiaries of
AMERCO to SAC Holdings over the last several years. The complaint seeks a declaration that such transfers are
void as well as unspecified damages. On October 28, 2002, AMERCO, the Shoen directors, the non-Shoen directors
and SAC Holdings filed Motions to Dismiss the complaint. In addition, on October 28, 2002, Ron Belec filed a
derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned Ron Belec
vs. William E. Carty, et al., CV 02-06331 and on January 16, 2003, M.S. Management Company, Inc. filed a
derivative action in the Second Judicial District Court of the State of Nevada, Washoe County, captioned M.S.
Management Company, Inc. vs. William E. Carty, et al., CV 03-00386. Two additional derivative suits were also
filed against these parties. These additional suits are substantially similar to the Paul F. Shoen derivative action. The
five suits assert virtually identical claims. In fact, three of the five plaintiffs are parties who are working closely
together and chose to file the same claims multiple times. These lawsuits alleged that the AMERCO Board lacked
independence. In reaching its decision to dismiss these claims, the court determined that the AMERCO Board of
Directors had the requisite level of independence required in order to have these claims resolved by the Board. The
court consolidated all five complaints before dismissing them on May 28, 2003. Plaintiffs appealed and, on
September 12, 2005 the Nevada Supreme Court heard oral arguments. The parties are awaiting a ruling.
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 thereunder, 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 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.
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