KANSAS CITY, Mo., Nov. 1 /PRNewswire-FirstCall/ -- H&R Block Inc.
(NYSE: HRB) today, in responding to rumors regarding litigation involving H&R
Block Inc. and its subsidiaries, stated that while amounts claimed in routine
litigation involving refund anticipation loans (RALs) were substantial, and
ultimate liability with respect to litigation is difficult to predict,
management continues to believe that amounts that might be paid by the company
for judgments or settlements in these cases will not have a material adverse
effect on the company's consolidated results of operations or financial
position. The company further stated that nothing in the current litigation
involving RALs would cause the company or the lending bank to change the fee
structure of its product offerings.
Block has not lost any of the more than 20 class action lawsuits filed
against it involving the refund anticipation loan program. Block has won
these cases on dispositive motions or they have been dropped by plaintiffs.
However, in order to avoid the uncertainty of litigation and the diversion of
resources and personnel resulting from the remaining lawsuits, in October
1999, H&R Block, the lending bank and plaintiffs in the case Joel E.
Zawikowski, et al. v. Beneficial National Bank, H&R Block Inc., et al., in the
United States District Court for Northern Illinois, agreed to a settlement on
a nationwide basis.
The settlement involves a $25 million fund, of which H&R Block paid half,
for class members. The settlement is not material to the company's
consolidated results of operations or financial position. That settlement was
approved by the District Court in February 2001, appealed to the Court of
Appeals, and reversed and remanded by the Court of Appeals in April 2002 for
further consideration by the District Court. A fairness hearing regarding the
settlement was held in October 2002 and will continue on Nov. 15, 2002.
Another pending class action case, Ronnie and Nancy Haese, et al., v. H&R
Block Inc, et al., pending since July 1996 in the District Court of Kleberg
County, Texas, is scheduled for jury trial on Dec. 2, 2002. Plaintiffs in
this case are part of the Zawikowski settlement class, and therefore would be
covered by that settlement.
In this Texas case, plaintiffs are trying to recover damages, which they
claim total $75 million, for Block's failure to disclose a license fee paid by
the bank to Block in connection with refund anticipation loans. Plaintiffs
also seek an undisclosed amount of punitive damages. The license fees
received by the company during the relevant time period totaled only
$3.5 million.
In a separate Texas class action case not currently scheduled for trial,
the same plaintiffs are seeking an unspecified amount of damages based upon
allegations of usury. H&R Block has denied all allegations and believes it
has a meritorious defense in both Texas cases. The second case is also part
of the Zawikowski settlement class, and therefore would be covered by that
settlement. In previous RAL class action decisions, other courts have held
that such loans are not usurious.
SOURCE H&R Block Inc.
 back to top
Related links:
http://www.hrblock.com
CONTACT:
Media Relations, Linda McDougall,
+1-816-932-7542, or Investor Relations, Becky Shulman,
+1-816-701-4574, both of H&R Block Inc.
|
