Albertsons 2007 Annual Report Download - page 117

SU
PERVAL
U
IN
C
. and
S
ubsidiaries
N
OTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Albertson’s failed to timel
y
pa
y
wa
g
es of terminated or resi
g
ned emplo
y
ees as required b
y
California law. The
l
awsuit further alleges a violation of the California Unfair Competition Law, Business and Professions Code
Sect
i
on 17200 et seq. T
h
e
l
awsu
i
t see
k
s recovery o
f
a
ll
wages, compensat
i
on an
d
/or pena
l
t
i
es owe
d
t
h
e mem
b
er
s
o
f the class certified, includin
g
compensation of one hour of pa
y
for rest or meal period violations and wa
g
es for
a
ll time worked while employees were clocked out for meal periods or required to remain on the premises durin
g
mea
l
per
i
o
d
s. T
h
e
l
awsu
i
t
f
urt
h
er see
k
s to recover a
ll
past
d
ue compensat
i
on an
d
pena
l
t
i
es
f
or
f
a
il
ure to prov
ide
a
ccurate itemized wa
g
e statements and to pa
y
all wa
g
es due at time of termination for members of the class
certified with interest from August 6, 2000 to time of trial. The Company is vigorously defending this lawsuit.
A
l
t
h
oug
h
t
hi
s
l
awsu
i
t
i
ssu
bj
ect to t
h
e uncerta
i
nt
i
es
i
n
h
erent
i
nt
h
e
li
t
i
gat
i
on process,
b
ase
d
on t
h
e
i
n
f
ormat
i
o
n
presentl
y
available to the Compan
y
, mana
g
ement does not expect that the ultimate resolution of this lawsuit will
h
ave a material adverse effect on the Company’s financial condition, results of operations or cash flows
.
On January 24, 2006, a class action complaint was filed in the Fourth Judicial District of the State of Idaho in an
d
f
or t
h
e County o
f
A
d
a, nam
i
ng A
lb
ertsons an
di
ts
di
rectors as
d
e
f
en
d
ants. T
h
e act
i
on (C
h
r
i
stop
h
er Carmona v.
H
enr
y
Br
y
ant et al., No. CV-OC 06012
5
1) challen
g
ed the a
g
reements entered into in connection with the serie
s
o
f transactions facilitating the sale of Albertsons to SUPERVALU, CVS and Cerberus Group. On May 18, 2006
,
t
h
e
d
e
f
en
d
ants entere
di
nto a memoran
d
um o
f
un
d
erstan
di
ng
f
or a
f
u
ll
sett
l
ement w
i
t
h
t
h
ep
l
a
i
nt
iff
.O
n
December 13, 2006, the Court held a hearin
g
for final approval of the settlement, and on Januar
y
23, 2007, issued
a
Memorandum Decision and Order granting approval. On March 9, 2007, the Court issued a Final Judgment and
Or
d
er o
f
D
i
sm
i
ssa
l
w
i
t
h
Pre
j
u
di
ce
.
Th
e Company
i
sa
l
so
i
nvo
l
ve
di
n rout
i
ne
l
ega
l
procee
di
ngs
i
nc
id
enta
l
to
i
ts operat
i
ons. Some o
f
t
h
ese rout
i
n
e
proceedin
g
s involve class alle
g
ations, man
y
of which are ultimatel
y
dismissed. Mana
g
ement does not expect that
the ultimate resolution of these legal proceedings will have a material adverse effect on the Company’s financia
l
con
di
t
i
on, resu
l
ts o
f
operat
i
ons or cas
hfl
ows
.
Th
e statements a
b
ove re
fl
ect management’s current expectat
i
ons
b
ase
d
on t
h
e
i
n
f
ormat
i
on present
l
y ava
il
a
bl
et
o
the Compan
y
. However, predictin
g
the outcomes of claims and liti
g
ation and estimatin
g
related costs an
d
exposures involves substantial uncertainties that could cause actual outcomes, costs and exposures to vary
mater
i
a
ll
y
f
rom current expectat
i
ons. In a
ddi
t
i
on, t
h
e Company regu
l
ar
l
y mon
i
tors
i
ts exposure to t
h
e
l
os
s
contin
g
encies associated with these matters and ma
y
from time to time chan
g
e its predictions with respect to
o
utcomes and its estimates with res
p
ect to related costs and ex
p
osures. It is
p
ossible that material differences i
n
a
ctua
l
outcomes, costs an
d
exposures re
l
at
i
ve to current pre
di
ct
i
ons an
d
est
i
mates, or mater
i
a
l
c
h
anges
i
n suc
h
predictions or estimates, could have a material adverse effect on the Compan
y
’s financial condition, results o
f
op
erations or cash flows.
I
nsurance
C
ontingencies
T
he Company has outstanding workers’ compensation and general liability claims with a former insurance
carr
i
er t
h
at
i
s exper
i
enc
i
ng
fi
nanc
i
a
l diffi
cu
l
t
i
es. I
f
t
h
e
i
nsurer
f
a
il
s to pay any covere
d
c
l
a
i
ms t
h
at excee
d
d
eductible limits, creatin
g
“excess claims,” the Compan
y
ma
y
have the abilit
y
to present these excess claims to
g
uarantee funds in certain states in which the claims originated. In the state where the Company faces the larges
t
potent
i
a
l
exposure,
l
eg
i
s
l
at
i
on was enacte
d
t
h
at t
h
e Company
b
e
li
eves
i
ncreases t
h
e
lik
e
lih
oo
d
o
f
state guarante
e
f
und protection. The Compan
y
currentl
y
cannot estimate the amount of the covered claims in excess of
d
eductible limits which will not be paid by the insurance carrier or otherwise. As of February 24, 2007, the
i
nsurance carr
i
er cont
i
nues to pay t
h
e Company’s c
l
a
i
ms. Base
d
on
i
n
f
ormat
i
on present
l
y ava
il
a
bl
etot
he
C
ompan
y
, mana
g
ement does not expect that the ultimate resolution of this matter will have a material adverse
effect on the Company’s financial condition, results of operations or cash flows
.
F-
51