On November 3, 2006, the Court approved the Plan of Allocation, attorney fees and the settlement. The case is now closed.
According to the Notice Of Pendency And Proposed Settlement Of Class Action dated August 1, 2006, the total proposed settlement fund is in the amount of Fund: Seven Million Dollars ($7,000,000) in cash. A settlement hearing is scheduled on November 2, 2006, to determine whether the settlement is fair, reasonable, and adequate.
As disclosed by the Company’s Form 10-Q for the quarterly period ended June 30, 2006, AMERCO is a defendant in a consolidated putative class action lawsuit entitled “In Re AMERCO Securities Litigation”, United States District Court, Case No. CV-N-03-0050-ECR (RAM). The action alleges claims for violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5 there under, section 20(a) of the Securities Exchange Act of 1934 and sections 11, 12, and 15 of the Securities Act of 1933. The action alleges, among other things, that AMERCO engaged in transactions with the SAC entities that falsely improved AMERCO’s financial statements and that AMERCO failed to disclose the transactions properly. The action has been transferred to the United States District Court, District of Arizona and assigned to Judge Bryan. Motions to Dismiss are fully briefed and are before the court. Prior to the ruling on the Motions to Dismiss, the parties have agreed to a settlement in principle, subject to final documentation and approval by the Court. The settlement in the amount of $5.0 million will be covered by AMERCO’s D&O insurance carrier.
The complaint alleges that Amerco and certain of its officers and directors violated the federal securities laws by issuing false and misleading statements during the Class Period. During the Class Period, Defendants caused Amerco to engage in transactions with SAC Holding Corporation and SAC Holding Corporation II (hereinafter "SAC Holdings"), which falsely improved Amerco's financials, and which served to benefit Amerco insiders to the detriment of Amerco shareholders. Defendants failed to disclose the true nature and financial impact of the transactions to the public.
Specifically, the complaint alleges that Amerco failed to disclose that Defendants used Amerco's resources to identify, purchase, and/or develop self-storage properties, which it then sold to SAC Holdings for inadequate consideration or caused SAC Holdings to buy. SAC Holdings, owned and controlled by Amerco insiders, thereby received substantial benefit from transactions which otherwise served to falsely improve Amerco's financials. On September 26, 2002, Amerco restated its 2002 financial results in an amended 10-K for the year ended March 31, 2002, and restated its 2001 and 2000 financials for the second time. As a result of the defendants' false and misleading statements during the Class Period, Amerco's stock price was artificially inflated, averaging approximately $18 per share. In the weeks following news of the above events, Amerco's share price tumbled to less than $5. Plaintiff and other members of the Class were damaged thereby.
Note: The complaint was first filed on behalf of all who purchased Amerco securities between February 12, 1998 and September 26, 2002, inclusive. Later, on or about February 27 of 2003, the same action (first identified complaint filed) was expanded to include investors of Amerco 8.5% Series A preferred shareholders who purchased their shares between February 12, 1998 and October 15, 2002, inclusive (the Subclass Period).