E-Z-GO 2011 Annual Report Download - page 27

2010, all defendants moved to dismiss the remaining counts of the amended complaint, and on August 24, 2011, the Court granted
the motion to dismiss on behalf of all defendants without leave to amend and entered judgment in favor of all defendants. On
September 23, 2011, plaintiffs filed a notice of appeal of the dismissal with the First Circuit Court of Appeals, which is currently
pending. Oral argument on the appeal has been scheduled for March 7, 2012.
As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, on August 21, 2009, a
purported class action lawsuit was filed in the United States District Court in Rhode Island by Dianne Leach, an alleged participant
in the Textron Savings Plan. Six additional substantially similar class action lawsuits were subsequently filed by other individuals.
The complaints varyingly name Textron and certain present and former employees, officers and directors as defendants. These
lawsuits allege that the defendants violated the United States Employee Retirement Income Security Act (ERISA) by imprudently
permitting participants in the Textron Savings Plan to invest in Textron common stock. The complaints seek equitable relief and
unspecified compensatory damages. On February 2, 2010, an amended class action complaint was filed consolidating the seven
previous lawsuits into a single complaint. On March 19, 2010, all defendants moved to dismiss the consolidated amended
complaint, and on September 6, 2011, the Court granted the motion to dismiss in part and denied the motion in part. Specifically,
the Court ruled that plaintiffs failed to plead sufficient allegations to support any claim that defendants made material
misrepresentations that would be actionable under ERISA, but permitted the remainder of the Amended Complaint to survive the
pleadings stage. On September 20, 2011, all defendants moved for partial reconsideration of the Court’s decision not to dismiss the
Amended Complaint. On December 5, 2011, the Court denied the motion for partial reconsideration without rendering a decision
on the merits of the issues raised therein, and the parties are currently engaged in discovery.
As previously reported in Textron’s Annual Report on Form 10-K for the fiscal year ended January 2, 2010, on November 18,
2009, a purported derivative lawsuit was filed by John D. Walker in the United States District Court of Rhode Island against
certain present and former officers and directors of Textron. The suit alleged violations of the federal securities laws consistent
with the Roseville action described above, as well as breach of fiduciary duties, waste of corporate assets and unjust enrichment.
On February 16, 2010, all defendants moved to dismiss the derivative complaint, and on September 13, 2011, the Court granted
the motion to dismiss on behalf of all defendants without leave to amend and entered judgment in favor of all defendants.
Plaintiffs have not filed an appeal of the dismissal with the First Circuit Court of Appeals, and the deadline for them to do so
expired on October 13, 2011.
Textron believes that these lawsuits are without merit and intends to defend them vigorously.
On February 7, 2012, a lawsuit was filed in the United States Bankruptcy Court, Northern District of Ohio, Eastern Division
(Akron) by Brian A. Bash, Chapter 7 Trustee for Fair Finance Company against TFC, Fortress Credit Corp. and Fair Facility I,
LLC. TFC provided a revolving line of credit of up to $17.5 million to Fair Finance Company from 2002 through 2007. The
complaint alleges numerous counts against TFC, as Fair Finance Company’s working capital lender, including receipt of
fraudulent transfers and assisting in fraud perpetrated on Fair Finance investors. The Trustee seeks avoidance and recovery of
alleged fraudulent transfers in the amount of $316 million as well as damages of $223 million on the other claims. The Trustee
also seeks trebled damages on all claims under Ohio law. This action was filed very recently; therefore, we are still in the process
of reviewing the complaint and assessing these claims. We intend to vigorously defend this lawsuit. An estimate of a range of
possible loss cannot be made as of the filing of this Annual Report on Form 10-K because of the early stage of the litigation.
We also are subject to other actual and threatened legal proceedings and other claims arising out of the conduct of our business.
These proceedings include claims relating to commercial and financial transactions; government contracts; alleged lack of
compliance with applicable laws and regulations; production partners; product liability; patent and trademark infringement;
employment disputes; and environmental, health and safety 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 do not believe that existing proceedings and
claims will have a material effect on our financial position or results of operations.
Item 4. Mine Safety Disclosures
Not applicable.
16
16 Textron Inc. Annual Report • 2011