Big Lots 2007 Annual Report Download - page 158

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BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10 — Commitments and Contingencies (Continued)
approximately 1,100 individuals had joined the Louisiana matter. We filed a motion to decertify the class and
the motion was denied on August 24, 2007. The Louisiana matter is scheduled to go on trial on May 5, 2008.
Although we are nearing completion of discovery on the plaintiffs’ claims, we cannot make a determination as
to the probability of a loss contingency resulting from the Louisiana matter or the estimated range of possible
loss, if any. We intend to vigorously defend ourselves against the allegations levied in the Louisiana matter;
however, the ultimate resolution of this matter could have a material adverse effect on our financial condition,
results of operations, and liquidity.
In September 2006, a class action complaint was filed against us in the Superior Court of the State of California,
County of Los Angeles, wherein it was alleged that we had violated certain California wage and hour laws by
misclassifying California store managers as exempt employees. The plaintiff seeks to recover, on his own behalf
and on behalf of all other individuals who are similarly situated, damages for alleged unpaid overtime, unpaid
minimum wages, wages not paid upon termination, improper wage statements, missed rest breaks, missed
meal periods, reimbursement of expenses, loss of unused vacation time, and attorneys’ fees and costs. Pending
discovery on the plaintiffs’ claims, we cannot make a determination as to the probability of a loss contingency
resulting from this lawsuit or the estimated range of possible loss, if any. We intend to vigorously defend
ourselves against the allegations levied in this lawsuit; however, the ultimate resolution of this matter could have
a material adverse effect on our financial condition, results of operations, and liquidity.
In May 2007, two class action complaints were filed against us, one in the Superior Court of the State of
California, County of Orange (“Stary matter”), and one in the Superior Court of the State of California, County
of San Diego (“Christopher matter”), wherein it was alleged that we had violated California law by requesting
certain customer information in connection with the return of merchandise for which the customer sought to
receive a refund to a credit card. The plaintiffs seek to recover, on their own behalf and on behalf of all other
individuals who are similarly situated, statutory penalties, costs and attorneys’ fees and seek injunctive relief.
We believe that substantially all of the purported class members of the Christopher matter are within the
purported class of the Stary matter. The Stary matter has been transferred to the Superior Court of the State
of California, County of San Diego, where it is being coordinated with the Christopher matter before the same
judge. Pending discovery on the plaintiffs’ claims, we cannot make a determination as to the probability of
a loss contingency resulting from these lawsuits or the estimated range of possible loss, if any. We intend to
vigorously defend ourselves against the allegations levied in these lawsuits; however, the ultimate resolution of
these matters could have a material adverse effect on our financial condition, results of operations, and liquidity.
In the fourth quarter of fiscal year 2006, we recorded pretax income of $2.6 million in selling and administrative
expenses upon receipt of settlement funds from the In re Visa Check/Mastermoney Antitrust Litigation matter
in the United States District Court for the Eastern District of New York. These settlement funds are intended to
compensate merchants for excessive fees paid for certain Visa and MasterCard transactions.
We are involved in other legal actions and claims, including various additional employment-related matters, arising
in the ordinary course of business. We currently believe that such actions and claims, both individually and in the
aggregate, will be resolved without material adverse effect on our financial condition, results of operations, or
liquidity. However, litigation involves an element of uncertainty. Future developments could cause these actions or
claims to have a material adverse effect on our financial condition, results of operations, and liquidity.
For a discussion of discontinued operations, including KB Toys matters, see note 11 to the accompanying
consolidated financial statements.
We are self-insured for certain losses relating to property, general liability, workers’ compensation, and
employee medical and dental benefit claims, a portion of which is paid by employees, and we have purchased
stop-loss coverage in order to limit significant exposure in these areas. Accrued insurance liabilities are
actuarially determined based on claims filed and estimates of claims incurred but not reported.