Audiovox 2000 Annual Report Download - page 43

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(24) Contingencies
The Company is a defendant in litigation arising from the normal conduct of
its affairs. The impact of the final resolution of these matters on the
Company’s results of operations or liquidity in a particular reporting period is
not known. Management is of the opinion, however, that the litigation in
which the Company is a defendant is either subject to product liability insur-
ance coverage or, to the extent not covered by such insurance, will not have
a material adverse effect on the Company’s consolidated financial position.
During 2000, the Company, along with other suppliers, manufacturers and
distributors of hand-held wireless telephones, was named as a defendant
in a class action lawsuit alleging damages relating to exposure to radio fre-
quency radiation from hand-held wireless telephones. An order dismissing
the Company as a defendant was granted on the grounds that the plaintiff
failed to make proper legal service. However, the plaintiff has the right to
effect proper legal service of the original complaint or file a new lawsuit.
The Company has not been re-served to date, nor has a new lawsuit been
filed. In the event that the Company is re-served or a new lawsuit is filed,
the Company would vigorously defend any claims against the Company.
The Company has guaranteed a $300 line of credit with a financial insti-
tution on behalf of one of its equity investments and has established
standby letters of credit to guarantee the bank obligations of Audiovox
Communications Sdn. Bhd. and Audiovox Venezuela (Note 21(b)).
AUDIOVOX CORPORATION AND SUBSIDIARIES
AUDIOVOX 41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)