Cash America 2011 Annual Report Download - page 65

34
Wyoming - Y
Total U.S. 783 -
Number of U.S. states 22 32
United Kingdom - Y
Australia - Y
Canada - Y
Mexico 190 -
Total Foreign 190 -
Number of Foreign Countries 1 3
Total Company 973 35
(
a
)
Includes five retail services locations that the Company operated under management agreements with a former franchisee.
The Company considers its equipment, furniture and fixtures and owned buildings to be in good condition. The
Company has its own construction supervisors who engage local contractors to selectively remodel and upgrade its retail
services locations throughout the year.
The Company’s leases typically require the Company to pay all maintenance costs, insurance costs and property
taxes. For additional information concerning the Company’s leases, see “Item 8. Financial Statements and
Supplementary Dataņ Note 13.”
ITEM 3. LEGAL PROCEEDINGS
On August 6, 2004, James E. Strong filed a purported class action lawsuit in the State Court of Cobb County,
Georgia against Georgia Cash America, Inc., Cash America International, Inc. (together with Georgia Cash America,
Inc., “Cash America”), Daniel R. Feehan, and several unnamed officers, directors, owners and “stakeholders” of Cash
America. The lawsuit alleges many different causes of action, among the most significant of which is that Cash
America made illegal short-term loans in Georgia in violation of Georgia’s usury law, the Georgia Industrial Loan Act
and Georgia’s Racketeer Influenced and Corrupt Organizations Act (“RICO”). First National Bank of Brookings, South
Dakota (“FNB”) and Community State Bank of Milbank, South Dakota (“CSB”) for some time made loans to Georgia
residents through Cash America’s Georgia operating locations. The complaint in this lawsuit claims that Cash America
was the true lender with respect to the loans made to Georgia borrowers and that FNB and CSB’s involvement in the
process is “a mere subterfuge.” Based on this claim, the suit alleges that Cash America was the “de facto” lender and
was illegally operating in Georgia. The complaint seeks unspecified compensatory damages, attorney’s fees, punitive
damages and the trebling of any compensatory damages. In November 2009, the trial court certified the case as a class
action lawsuit, and after an appeal by Cash America, the Supreme Court of Georgia upheld the class certification in
March 2011. In August 2011, Cash America filed a motion for summary judgment, and in October 2011, the plaintiffs
filed a cross-motion for partial summary judgment. Hearings on the motions were held in October and November 2011.
The trial court entered an order granting summary judgment in favor of Cash America on one of plaintiff’s claims,
denying the remainder of Cash America’s motion and granting plaintiff’s cross-motion for partial summary judgment.
Cash America filed a notice of appeal in December 2011 on the grant of partial summary judgment, which plaintiffs
sought to dismiss. A hearing was held on plaintiff’s motion to dismiss the appeal in January 2012, and the trial court
denied the motion. The appeal has not yet been scheduled with the Georgia Court of Appeals. The case is set for jury
trial in March 2012. The Company is currently unable to estimate a range of reasonably possible losses, as defined by
ASC 450-20-20, Contingencies—Loss Contingencies—Glossary (“ASC 450-20-20”), for this litigation. Cash America
believes that the Plaintiffs’ claims in this suit are without merit and is vigorously defending this lawsuit.
Cash America and CSB also commenced a federal lawsuit on September 7, 2004 in the U.S. District Court for
the Northern District of Georgia seeking to compel Mr. Strong to arbitrate his claims against Cash America and CSB.
The U.S. District Court dismissed the federal action for lack of subject matter jurisdiction, and Cash America and CSB
appealed the dismissal of their complaint to the U.S. Court of Appeals for the 11th Circuit. The 11th Circuit issued a
panel decision in April 2007 reversing the district court’s dismissal of the action and remanding the action to the district