Vistaprint 2006 Annual Report Download - page 39

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Table of Contents
Item 3. Legal Proceedings
One of our subsidiaries and our predecessor corporation were named as defendants in a purported class action law suit filed in Los
Angeles County (California) Superior Court on September 14, 2004. The complaint alleged that the shipping and handling fees we charge for free
products are excessive and in violation of sections of the California Business and Professions Code. The Los Angeles County Superior Court
granted preliminary approval of a proposed settlement on April 29, 2005 and, on June 17, 2005, gave final approval to the settlement. Under the
terms of the settlement, we have agreed to change the term ‘shipping and handling’ to ‘shipping and processing’ on our websites, to provide all
class members who purchase business cards from us for a two year period the opportunity to receive additional cards at reduced rates, and to pay
reasonable attorneys fees to plaintiffs’ counsel. In August 2005, an objector to the settlement filed an appeal of the court’s final approval of the
settlement and we are unable to express an opinion as to the likely outcome of this appeal.
We are involved, from time to time, in various legal proceedings arising from the normal course of business activities. Although the results
of litigation and claims cannot be predicted with certainty, we do not expect resolution of these matters to have a material adverse impact on our
consolidated results of operations, cash flows or financial position. However, an unfavorable resolution of such a proceeding could, depending on
its amount and timing, materially affect our results of operations, cash flows or financial position in a future period. Regardless of the outcome,
litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors.
Item 4. Submission of Matters to a Vote of Security Holders
None.
36