U-Haul 2007 Annual Report Download - page 103

AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Note 17: Contingencies
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 prior to the filing
of the complaint. 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 July 13, 2006, the
Nevada Supreme Court reviewed and remanded the claim to the trial court for proceedings consistent with its ruling,
allowing the plaintiffs to file an amended complaint and plead in addition to substantive claims, demand futility. On
November 8, 2006, the nominal plaintiffs filed an Amended Complaint. On December 22, 2006, the defendants filed
Motions to Dismiss. Briefing was concluded on February 21, 2007. On March 30, 2007, the Court heard oral argument on
Defendants’ Motions to Dismiss and requested supplemental briefing. The supplemental briefs were filed on May 14, 2007.
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 in total 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 management’ s opinion none of these other matters will have a material effect on the Company’ s financial
position and results of operations.
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