Visa 2009 Annual Report Download - page 125

Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2009
(in millions, except as noted)
relationship with VisaNet do Brasil. The SDE administrative proceeding follows the issuance of a report by the Central Bank of Brazil suggesting, among
other things, that the single-acquirer structure in Brazil be changed.
Visa International and Visa do Brasil appealed the injunction to Conselho Administrativo de Defesa Econômica (CADE), the Brazilian competition
authority, and on September 16, 2009, CADE revoked the injunction in its entirety.
Kabuki Restaurants
On January 5, 2009, Kabuki Restaurants, Inc. filed a putative class action lawsuit against Visa Inc. in California Superior Court. The plaintiff alleged
that Visa's practice of imposing fines on acquiring banks for their merchants' failure to abide by certain Visa rules, including fines related to the Cardholder
Information Security Program (CISP) and Account Data Compromise Recovery (ADCR) process, violates California state law, including Business and
Professions Code §§17200 et seq. Before Visa filed a responsive pleading, Kabuki voluntarily dismissed the action without prejudice and re-filed the suit on
an individual basis. On July 22, 2009, the parties executed an agreement to settle the litigation, and the case was subsequently dismissed with prejudice. The
settlement amount is not considered material to the consolidated financial statements.
Loiseau
On March 17, 2009, Robert Loiseau filed a putative class action against Visa U.S.A. in California Superior Court asserting claims for breach of
contract, unjust enrichment and violations of Business and Professions Code §§17200 et seq. The plaintiff alleges that certain terms and conditions associated
with Visa gift cards are unlawful. On June 2, 2009, plaintiff amended the complaint to add the card issuer, Metabank, as a defendant. On September 1, 2009,
plaintiff filed a Second Amended Complaint that included more specific class allegations. On the basis of those allegations, on October 2, 2009, Metabank
removed the case to the U.S. District Court for the Southern District of California. Visa moved to dismiss the Second Amended Complaint as to Visa on
October 9, 2009. On November 17, 2009, the court granted Visa's motion and dismissed the complaint without prejudice, giving plaintiff leave to file an
amended complaint.
The Reserve Primary Fund
On May 5, 2009, Visa U.S.A. commenced an action in the United States Court for the Southern District of New York against The Reserve Primary
Fund (the "Fund") and related entities in connection with the Fund's failure to promptly redeem in full Visa U.S.A.'s investment in a money market mutual
fund. On September 15, 2008, Visa U.S.A. sought to redeem its entire investment of over $981 million, plus accrued dividends. The Fund failed to return Visa
U.S.A.'s investment within one business day as required by the Fund's prospectus. Since that time, the Fund announced a liquidation plan and has so far made
interim distributions returning approximately 90% of Visa U.S.A.'s investment. Visa U.S.A. is seeking damages in excess of $98 million, the amount of its
investment currently held by the Fund. Also see Note 5—Investments and Fair Value Measurements and Note 6—Prepaid Expenses and Other Assets. On
May 5, 2009, the SEC commenced an action in the U.S. District Court for the Southern District of New York against the Fund and has proposed an alternative
plan of liquidation.
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