United Airlines 2015 Annual Report Download - page 25

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In 2001, the California Regional Water Quality Control Board (“CRWQCB”) mandated a field study of the area surrounding Continental’s aircraft
maintenance hangar in Los Angeles. The study was completed in September 2001 and identified aircraft fuel and solvent contamination on and adjacent to
this site. In April 2005, Continental began environmental remediation of aircraft fuel contamination surrounding its aircraft maintenance hangar pursuant to a
workplan submitted to and approved by the CRWQCB and its landlord, the Los Angeles World Airports. The Company accrued a reserve in an amount
expected by the Company to cover environmental remediation costs for this site.
On October 13, 2015, United received a Civil Investigative Demand (“CID”) from the Civil Division of the United States Department of Justice (“DOJ”). The
CID requested documents and oral testimony from United in connection with a DOJ investigation related to delivery scan and other data purportedly required
for payment for the carriage of mail under United’s International Commercial Air Contracts with the United States Postal Service. The Company is responding
to the DOJ’s request. The Company cannot predict what action, if any, might be taken in the future by the DOJ or other governmental authorities as a result of
the investigation.
On June 30, 2015, UAL received a CID from the Antitrust Division of the DOJ seeking documents and information from the Company in connection with a
DOJ investigation related to statements and decisions about airline capacity. The Company is working with the DOJ and has completed its response to the
CID. The Company is not able to predict what action, if any, might be taken in the future by the DOJ or other governmental authorities as a result of the
investigation. Beginning on July 1, 2015, subsequent to the announcement of the CID, UAL and United were named as defendants in multiple class action
lawsuits that asserted claims under the Sherman Antitrust Act, which have been consolidated in the United States District Court for the District of Columbia.
The complaints generally allege collusion among U.S. airlines on capacity impacting airfares and seek treble damages. The Company intends to vigorously
defend against the class action lawsuits.
As disclosed in the Company’s annual report on Form 10-K for the year ended December 31, 2014, the Company and certain of its current and former
executive officers and employees have received federal grand jury subpoenas requesting records and testimony related to certain individuals formerly
associated with the Port Authority of New York and New Jersey and related operations of the Company and the Company continues to conduct an internal
investigation in response. As announced in September 2015, certain of the Company’s executives stepped down in connection with this internal
investigation. The Company is cooperating with the ongoing investigation by the U.S. Attorney’s Office for the District of New Jersey and a related
investigation by the SEC, and has participated in discussions with representatives of governmental authorities. The Company cannot predict what action, if
any, might be taken in the future by government authorities.
Other Legal Proceedings
The Company is involved in various other claims and legal actions involving passengers, customers, suppliers, employees and government agencies arising
in the ordinary course of business. Additionally, from time to time, the Company becomes aware of potential non-compliance with applicable environmental
regulations, which have either been identified by the Company (through internal compliance programs such as its environmental compliance audits) or
through notice from a governmental entity. In some instances, these matters could potentially become the subject of an administrative or judicial proceeding
and could potentially involve monetary sanctions. After considering a number of factors, including (but not limited to) the views of legal counsel, the nature
of contingencies to which the Company is subject and prior experience, management believes that the ultimate disposition of these other claims and legal
actions will not materially affect its consolidated financial position or results of operations. However, the ultimate resolutions of these matters are inherently
unpredictable. As such, the Company’s financial condition and results of operations could be adversely affected in any particular period by the unfavorable
resolution of one or more of these matters.
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Not applicable.
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Source: United Continental Holdings, Inc., 10-K, February 18, 2016 Powered by Morningstar® Document Research℠
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