Visa 2007 Annual Report Download - page 151

Table of Contents
VISA U.S.A. INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes the activity related to accrued litigation in fiscal 2007 and 2006:
2007 2006
(in thousands)
Balance at October 1 $ 999,703 $ 1,207,920
Provision for settled legal matters 1,940,830 34,385
Provision for unsettled legal matters 714,000 —
Bank co-defendants' obligation to American Express(1) 185,000 —
Insurance recovery (2,000) (11,500)
Interest accretion on settled matters 74,959 91,583
Payments on settled matters (230,500) (322,685)
Balance at September 30 $ 3,681,992 $ 999,703
(1) Visa Inc. will consolidate the initial payment to American Express (see discussion below) on behalf of the five co-defendant banks. The Company has recorded a corresponding
receivable in prepaid and other current assets on the Company's consolidated balance sheets at September 30, 2007.
Covered Litigation
Visa U.S.A. is party to certain legal proceedings discussed below, which the Company refers to as the covered litigation. The retrospective
responsibility plan is designed to address potential liability under the covered litigation. Covered litigation means:
• The Discover Litigation. Discover Financial Services Inc. v. Visa U.S.A. Inc., Case No. 04-CV-07844 (S.D.N.Y.), which we refer to as the
Discover litigation;
• The American Express Litigation. American Express Travel Related Services Co., Inc. v. Visa U.S.A. Inc. et al., No. 04-CV-0897 (S.D.N.Y.),
which we refer to as the American Express litigation;
• The Attridge Litigation. Attridge v. Visa U.S.A. Inc. et al., Case No. CGC-04-436920 (Cal. Super.), which we refer to as the Attridge litigation;
• The Interchange Litigation. In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 1:05-md-01720-JG-JO (E.D.N.Y.)
or MDL 1720, including all cases currently included in MDL 1720, any other case that includes claims for damages relating to the period prior to
this offering that is transferred for coordinated or consolidated pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on
Multidistrict Litigation or otherwise included at any time in MDL 1720 by order of any court of competent jurisdiction and Kendall v. Visa
U.S.A., Inc. et al., Case No. CO4-4276 JSW (N.D. Cal.), which we refer to collectively as the interchange litigation; and
• any claim that challenges the reorganization or the consummation thereof; provided that such claim is transferred for coordinated or consolidated
pre-trial proceedings at any time to MDL 1720 by the Judicial Panel on Multidistrict Litigation or otherwise included at any time in MDL 1720
by order of any court of competent jurisdiction.
Rule 2.10(e) Litigation
American Express/Discover
On October 4, 2004, Discover Financial Services, Inc. (Discover) filed an action against Visa U.S.A., Visa International and MasterCard International
Incorporated (MasterCard) in United States District Court for the Southern District of New York. On November 15, 2004, American Express Travel Related
Services Company,
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