Office Depot 2008 Annual Report Download - page 19

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18
In early November 2007, two putative class action lawsuits were filed against the Company and certain of its
executive officers alleging violations of the Securities Exchange Act of 1934. In addition, two putative shareholder
derivative actions were filed against the Company and its directors alleging various state law claims including
breach of fiduciary duty. The allegations in all four lawsuits primarily relate to the accounting for vendor program
funds. Each of the above-referenced lawsuits was filed in the Southern District of Florida, and is captioned as
follows: (1) Nichols v. Office Depot, Inc., Steve Odland and Patricia McKay filed on November 6, 2007; (2) Sheet
Metal Worker Local 28 Pension Fund v. Office Depot, Inc., Steve Odland and Patricia McKay filed on November 5,
2007; (3) Marin, derivatively, on behalf of Office Depot, Inc. v. Office Depot, Inc., Steve Odland, Neil R. Austrian,
David W. Bernauer, Abelardo E. Bru, Marsha J. Evans, David I. Fuente, Brenda J. Gaines, Myra M. Hart, Kathleen
Mason, Michael J. Myers, and Office Depot, Inc. filed on November 8, 2007; and (4) Mason, derivatively, on behalf
of Office Depot, Inc. v. Steve Odland, Neil R. Austrian, David W. Bernauer, Abelardo E. Bru, Marsha J. Evans,
David I. Fuente, Brenda J. Gaines, Myra M. Hart, Kathleen Mason, Michael J. Myers, and Office Depot, Inc. filed
on November 8, 2007.
On March 21, 2008, the court in the Southern District of Florida entered an Order consolidating the class action
lawsuits and an Order consolidating the derivative actions. Lead plaintiff in the consolidated class actions, the New
Mexico Educational Retirement Board, filed its Consolidated Amended Complaint on July 2, 2008. On September 2,
2008, Office Depot filed a motion to dismiss the Consolidated Amended Complaint on the basis that it fails to state a
claim, which remains pending. We are still awaiting an amended complaint in the derivative action. We plan to
vigorously defend both the consolidated class action and the consolidated derivative action, which are in their early
stages.
As part of a normal process of doing business with federal, local and state governmental agencies, we are subject to
audits and reviews of our governmental contracts. Many of these audits and reviews are resolved without incident,
however we have had several highly publicized inquiries by certain state agencies into contract pricing, and
additional state inquiries may follow. We currently do not anticipate that this will have a material effect on our
business. We are currently cooperating with the Florida and Missouri Attorneys General with respect to civil
investigations regarding our pricing practices that relate primarily to government customers. We first became aware
of the Florida matter in the second quarter of 2008 and the Missouri matter in the first quarter of 2009. We are also
cooperating with the U.S. Department of Defense (“DOD”), the Department of Education, and the General Services
Administration (“GSA”) with respect to their joint investigations that are being conducted in coordination with the
Department of Justice regarding our pricing practices that relate to sales to certain federal agencies. We first became
aware of the GSA matter on December 29, 2008, the DOD matter on January 20, 2009 and the Department of
Education matter on February 19, 2009. No claim for relief has been made in any of these matters and management
cannot predict their ultimate outcome.
Item 4. Submission of Matters to a Vote of Security Holders.
None.