Circuit City 2010 Annual Report Download - page 18

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Europe
As of December 31, 2010, we have seven distribution centers in Europe which aggregate approximately 295,000 square feet. Six of these,
aggregating approximately 219,000 square feet, are leased; one distribution center of approximately 76,000 square feet is owned by the
Company. Our administrative offices and call centers aggregate approximately 270,000 square feet, of which 192,000 square feet are leased and
78,000 square feet are owned by the Company.
Please refer to Note 10 to the Consolidated Financial Statements for additional information about leased properties.
Item 3. Legal Proceedings.
Other Matters
The Company and its subsidiaries are involved in various lawsuits, claims, investigations and proceedings including commercial, employment,
consumer, personal injury and health and safety law matters, which are being handled and defended in the ordinary course of business. In
addition, the Company is subject to various assertions, claims, proceedings and requests for indemnification concerning intellectual property,
including patent infringement suits involving technologies that are incorporated in a broad spectrum of products the Company sells. The
Company is also audited by (or has initiated voluntary disclosure agreements with) numerous governmental agencies in various countries,
including U.S. Federal and state authorities, concerning potential income tax, sales tax and unclaimed property liabilities. These matters are in
various stages of investigation, negotiation and/or litigation, and are being vigorously defended. Although the Company does not expect, based
on currently available information, that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its
financial condition or results of operations, the ultimate outcome is inherently unpredictable. Therefore, judgments could be rendered or
settlements entered, that could adversely affect the Company’
s operating results or cash flows in a particular period. Additionally, our Audit
Committee, with the assistance of independent counsel, is conducting an independent investigation into certain anonymous whistleblower
allegations concerning our Miami, Florida operations. While the investigation is not yet complete, it does not appear that there is any material
impact on our reported consolidated financial statements. The Company routinely assesses all of its litigation and threatened litigation as to the
probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where it assesses the likelihood of
loss as probable and estimable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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