AutoNation 2003 Annual Report Download - page 67

Table of Contents
AUTONATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
At December 31, 2003, aggregate maturities of notes payable and long-term debt, excluding floorplan notes payable, were as follows:
Year Ending December 31:
2004 $15.9
2005 13.7
2006 141.4
2007 9.6
2008 498.9
2009 144.9
$824.4
9. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is involved, and will continue to be involved, in numerous legal proceedings arising out of the conduct of its business,
including litigation with customers, employment related lawsuits, class actions, purported class actions and actions brought by governmental
authorities.
In an action filed in Florida state court in 1999, one of the Company’s subsidiaries was accused of violating, among other things, the
Florida Motor Vehicle Retail Sales Finance Act and the Florida Deceptive and Unfair Trade Practices Act by allegedly failing to deliver executed
copies of retail installment contracts to customers of the Company’s former used vehicle megastores. In October 2000, the court certified the
class of customers on whose behalf the action would proceed. In July 2001, Florida’s Fourth District Court of Appeals upheld the certification
of the class. The parties subsequently agreed on settlement terms involving the payment of cash and coupons towards the purchase of
vehicles, the dollar value of which is not material. In August 2003, the Court approved the settlement.
Many of the Company’s Texas dealership subsidiaries have been named in three class action lawsuits brought against the Texas
Automobile Dealers Association (“TADA”) and approximately 700 new vehicle dealerships in Texas that are members of the TADA. The three
actions allege that since January 1994, Texas dealers have deceived customers with respect to a vehicle inventory tax and violated federal
antitrust and other laws as well. In April 2002, in two actions (which have been consolidated), the state court certified two classes of
consumers on whose behalf the action would proceed. In October 2002, the Texas Court of Appeals affirmed the trial court’s order of class
certification in the state action and the Company is appealing the ruling to the Texas Supreme Court. In March 2003, the federal court
conditionally certified a class of consumers in the federal antitrust case. The Company is appealing the ruling. In August 2003, the plaintiffs
and certain key defendants, including the Company’s Texas dealerships, reached an understanding on proposed settlement terms for all
three cases. However, certain conditions to the adoption of the proposed settlement were not satisfied, and the settlement discussions were
discontinued. The Company intends to vigorously assert available defenses in connection with the TADA lawsuits. Further, the Company
may have certain rights of indemnification with respect to certain aspects of these matters. However, an adverse resolution of the TADA
lawsuits could result in the payment of significant costs and damages and negatively impact our ability to itemize and pass through to the
customer the cost of the tax in the future, which could have a material adverse effect on the Company’s results of operations, financial
condition and cash flows.
In addition to the foregoing cases, the Company is also a party to numerous other legal proceedings that arose in the conduct of its
business. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its results of
operations, financial condition or cash flows.
59