U-Haul 2008 Annual Report Download - page 16

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Item 3.
Legal Proceedings
Shoen
In September 2002, Paul F. Shoen filed a shareholder derivative lawsuit 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 as a nominal Defendant in the case. 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 prior to the filing of the complaint. The complaint seeks a declaration that such transfers are void
as well as unspecified damages. In October 2002, the Defendants filed motions to dismiss the complaint. In October
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 in January 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. Each of these suits is substantially similar to the Paul F. Shoen
case. The Court consolidated the five cases and thereafter dismissed these actions in May 2003, concluding that the
AMERCO Board of Directors had the requisite level of independence required in order to have these claims
resolved by the Board. Plaintiffs appealed this decision and, in July 2006, the Nevada Supreme Court reviewed and
remanded the case 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.
In November 2006, the Plaintiffs filed an amended complaint. In December 2006, the Defendants filed motions to
dismiss, based on various legal theories. In March 2007, the Court denied AMERCO’ s motion to dismiss regarding
the issue of demand futility, stating that “Plaintiffs have satisfied the heightened pleading requirements of demand
futility by showing a majority of the members of the AMERCO Board of Directors were interested parties in the
SAC transactions.” The Court heard oral argument on the remainder of the Defendants’ motions to dismiss,
including the motion (“Goldwasser Motion”) based on the fact that the subject matter of the lawsuit had been settled
and dismissed in earlier litigation known as Goldwasser v. Shoen, CV 0205602, Washoe County, Nevada. In
addition, in September and October 2007, the Defendants filed Motions for Judgment on the Pleadings or in the
Alternative Summary Judgment, based on the fact that the stockholders of the Company had ratified the underlying
transactions at the 2007 annual meeting of stockholders of AMERCO. In December 2007, the Court denied this
motion. This ruling does not preclude a renewed motion for summary judgment after discovery and further
proceedings on these issues. On April 7, 2008, the litigation was dismissed, on the basis of the Goldwasser Motion.
On May 8, 2008, the Plaintiffs filed a notice of appeal of such dismissal to the Nevada Supreme Court. On May 20,
2008, AMERCO filed a cross appeal relating to the denial of its Motion to Dismiss in regards to Demand Futility.
The appeals are currently pending.
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 adverse effect
on AMERCO’ s financial position or results of operations.
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 result in a
material adverse effect on AMERCO’ s financial position or results of operations. Real Estate expects to spend
approximately $5.7 million in total through 2011 to remediate these properties.