Visa 2015 Annual Report Download - page 101

VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2015
settle transactions, manage certain relationships with sponsors, clients and merchants, and comply
with rules relating to the operation of the Visa enterprise. Under the Framework Agreement, the
Company indemnifies Visa Europe for claims arising from the Company’s or Visa Europe’s activities
that are brought outside of Visa Europe’s region; and Visa Europe likewise indemnifies the Company
for such claims brought within Visa Europe’s region. However, Visa Europe has informed us of its view
that it is not obligated to indemnify the Company or Visa International for any claim relating to the
European Competition Proceedings, including claims asserted in both the European Commission
matter and the U.K. Merchant Litigation. The Company continues to firmly believe that Visa Europe is
obligated to indemnify the Company for all such claims. See Note 20—Legal Matters.
The Company has not recorded liabilities associated with these obligations as the fair value of
such obligations was determined to be insignificant at September 30, 2015 and 2014, respectively. The
Company has determined that the value of services exchanged as a result of these various
agreements approximates fair value at September 30, 2015 and 2014, respectively.
Note 3—U.S. Retrospective Responsibility Plan and Potential Visa Europe Liabilities
U.S. Retrospective Responsibility Plan
The Company has established several related mechanisms designed to address potential liability
under certain litigation referred to as the “U.S. covered litigation.” These mechanisms are included in
and referred to as the U.S. retrospective responsibility plan, or the plan, and consist of a litigation
escrow agreement, the conversion feature of the Company’s shares of class B common stock, the
indemnification obligations of the Visa U.S.A. members, an interchange judgment sharing agreement,
a loss sharing agreement, and an omnibus agreement, as amended.
U.S. covered litigation consists of:
•the Discover Litigation. Discover Financial Services Inc. v. Visa U.S.A. Inc., Case
No. 04-CV-07844 (S.D.N.Y) (settled);
•the American Express Litigation. American Express Travel Related Services Co., Inc. v.
Visa U.S.A. Inc. et al., No. 04-CV-0897 (S.D.N.Y.), which the Company refers to as the
American Express litigation (settled);
•the Attridge Litigation. Attridge v. Visa U.S.A. Inc. et al., Case No. CGC-04-436920 (Cal.
Super.) (dismissed with prejudice);
•the Interchange Multidistrict Litigation. In re Payment Card Interchange Fee and Merchant
Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.) or MDL 1720, including all
cases currently included in MDL 1720, any other case that includes claims for damages
relating to the period prior to the Company’s IPO that has been or is transferred for
coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial
Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of
any court of competent jurisdiction and Kendall v. Visa U.S.A., Inc. et al., Case No. CO4-
4276 JSW (N.D. Cal.);
• any claim that challenges the reorganization or the consummation thereof; provided that
such claim is transferred for coordinated or consolidated pre-trial proceedings at any time to
MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time
in MDL 1720 by order of any court of competent jurisdiction; and
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