E-Z-GO 2005 Annual Report Download - page 31

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11
Item 3. Legal Proceedings
Two identical lawsuits purporting to be class actions were filed in 2002 in the United States District Court in Rhode Island against Textron and cer-
tain present and former officers of Textron and Bell Helicopter by Textron shareholders suing on their own behalf and on behalf of a purported
class of Textron shareholders. A consolidated amended complaint alleged that the defendants failed to make certain accounting adjustments in
response to alleged problems with Bell Helicopter’s V-22 and H-1 programs and that the company failed to timely write down certain assets of its
OmniQuip unit. The complaint sought unspecified compensatory damages. On June 15, 2004, the District Court ruled that the plaintiffs could not
maintain the claims that were based on allegations relating to the H-1 program or to OmniQuip, and also ruled that all claims against one of the
individual defendants should be dismissed. The District Court certified the class of shareholders on May 11, 2005. All claims in the litigation
were subsequently settled for a cash amount to be paid by Textron’s insurer. The settlement was preliminarily approved by the District Court on
January 31, 2006.
Separately, two identical lawsuits, purporting to be class actions on behalf of Textron benefit plans and participants and beneficiaries of those
plans during 2000 and 2001, were filed in 2002 in the United States District Court in Rhode Island against Textron, the Textron Savings Plan and
the Plan’s trustee. A consolidated amended complaint alleges breach of certain fiduciary duties under ERISA, based on the amount of Plan assets
invested in Textron stock during 2000 and 2001. The complaint seeks equitable relief and compensatory damages on behalf of various Textron
benefit plans and the participants and beneficiaries of those plans during 2000 and 2001 to compensate for alleged losses relating to Textron
stock held as an asset of those plans. Textron’s Motion to Dismiss the consolidated amended complaint was granted on June 24, 2003. On May 7,
2004, the United States Court of Appeals for the First Circuit affirmed dismissal of all claims against the Plan’s trustee and against the Plan itself,
and also affirmed dismissal of certain other claims against Textron. However, the Court of Appeals ruled that plaintiffs should be permitted to
attempt to develop their breach of fiduciary duty claims, and remanded those claims to the District Court. Textron believes this lawsuit is without
merit and intends to defend this action vigorously.
We are subject to actual and threatened legal proceedings arising out of the conduct of our business. These proceedings include claims arising
from private transactions, government contracts, product liability, employment and environmental, safety and health matters. Some of these legal
proceedings seek damages, fines or penalties in substantial amounts or remediation of environmental contamination. Under federal government
procurement regulations, certain claims brought by the U.S. Government could result in our suspension or debarment from U.S. Government
contracting for a period of time. On the basis of information presently available, we believe that these legal proceedings will not have a material
effect on our financial position or results of operations.
Item 3. Legal Proceedings