Legal	9 Months Ended
Sep. 30, 2013
Legal
Legal	6. Legal On September 11, 2009, a putative class action was filed by an individual consumer named David Giambusso in the United States District Court for the Southern District of California. The complaint alleged that Guitar Center and other defendants, including a trade association and several musical instrument manufacturers, exchanged sensitive information and strategies for implementing minimum advertised pricing, attempted to restrict retail price competition and monopolize at trade association-organized meetings, all in violation of Sections 1 and 2 of the Sherman Antitrust Act and California’s Unfair Competition Law. Subsequently, numerous additional lawsuits were filed in several federal courts (and one state court) attempting to represent comparable classes of plaintiffs with parallel allegations. Some of these lawsuits have expanded the group of defendants to include other manufacturers and others have alleged additional legal theories under state laws. In December 2009 and January 2010, the Judicial Panel on Multidistrict Litigation issued several orders which had the effect of consolidating all pending actions in federal court under the caption In Re Musical Instruments and Equipment Antitrust Litigation, Case No. MDL-2121 (“MDL 2121”), except one state action filed in Tennessee. However, on July 18, 2013, the Tennessee matter was joined with MDL 2121, which remains pending before the Ninth Circuit Court of Appeals. We are not currently able to estimate a probable outcome or range of loss in this matter. On August 31, 2011, a putative class action was filed by a former employee in San Francisco Superior Court in an action entitled Carson Pellanda vs. Guitar Center, Inc. The complaint alleges that Guitar Center allegedly violated California wage and hour laws, including failure to provide required meal periods and rest breaks, unpaid work time and failure to provide accurate itemized wage statements. A mediation was held on May 17, 2012, but no settlement was reached. A second mediation was held on October 4, 2013. A Mediator’s Proposal was accepted on October 28, 2013. The loss was not material to our consolidated financial statements. On May 24, 2011, a putative class action was filed in Los Angeles Superior Court in an action entitled Jason George vs. Guitar Center, Inc. and Guitar Center Stores, Inc. The complaint alleges that Guitar Center violated the California Song-Beverly Credit Card Act by requesting that its customers provide personal identification information in connection with the use of their credit cards. The complaint seeks monetary damages including statutory civil penalties in amounts of up to $1,000 per violation. In December 2012, a motion for summary judgment was filed on behalf of Guitar Center. A tentative ruling was issued by the court granting Guitar Center’s motion for summary judgment. The court ordered additional limited discovery. The motion for summary judgment will be heard by the court on November 8, 2013. We are not currently able to estimate a probable outcome or range of loss in this matter. On March 18, 2013, a putative class action was filed in Los Angeles Superior Court in an action entitled Stewart vs. Guitar Center, Inc. and Guitar Center Stores, Inc. The complaint alleges that Guitar Center allegedly violated California wage and hour laws, including failure to provide required meal periods, rest breaks, unpaid work time, and failure to provide accurate itemized wage statements. Guitar Center has retained defense counsel. Guitar Center has filed a Motion to Abate due to duplicative litigation in the pending Pellanda vs. Guitar Center action. We are not currently able to estimate a probable outcome or range of loss in this matter. This matter will be joined with the Pellanda settlement. In addition to the matters described above, we are involved in various claims and legal actions in the normal course of business. We expect to defend all unresolved actions vigorously. We cannot assure you that we will be able to achieve a favorable settlement of these lawsuits or obtain a favorable resolution if they are not settled. However, it is management’s opinion that, after consultation with counsel and a review of the facts, a material loss with respect to our financial position, results of operations and cash flows is not probable from such currently pending normal course of business litigation matters.

6. Legal

On September 11, 2009, a putative class action was filed by an individual consumer named David Giambusso in the United States District Court for the Southern District of California. The complaint alleged that Guitar Center and other defendants, including a trade association and several musical instrument manufacturers, exchanged sensitive information and strategies for implementing minimum advertised pricing, attempted to restrict retail price competition and monopolize at trade association-organized meetings, all in violation of Sections 1 and 2 of the Sherman Antitrust Act and California’s Unfair Competition Law. Subsequently, numerous additional lawsuits were filed in several federal courts (and one state court) attempting to represent comparable classes of plaintiffs with parallel allegations. Some of these lawsuits have expanded the group of defendants to include other manufacturers and others have alleged additional legal theories under state laws.

In December 2009 and January 2010, the Judicial Panel on Multidistrict Litigation issued several orders which had the effect of consolidating all pending actions in federal court under the caption In Re Musical Instruments and Equipment Antitrust Litigation, Case No. MDL-2121 (“MDL 2121”), except one state action filed in Tennessee. However, on July 18, 2013, the Tennessee matter was joined with MDL 2121, which remains pending before the Ninth Circuit Court of Appeals. We are not currently able to estimate a probable outcome or range of loss in this matter.

On August 31, 2011, a putative class action was filed by a former employee in San Francisco Superior Court in an action entitled Carson Pellanda vs. Guitar Center, Inc. The complaint alleges that Guitar Center allegedly violated California wage and hour laws, including failure to provide required meal periods and rest breaks, unpaid work time and failure to provide accurate itemized wage statements. A mediation was held on May 17, 2012, but no settlement was reached. A second mediation was held on October 4, 2013. A Mediator’s Proposal was accepted on October 28, 2013. The loss was not material to our consolidated financial statements.

On May 24, 2011, a putative class action was filed in Los Angeles Superior Court in an action entitled Jason George vs. Guitar Center, Inc. and Guitar Center Stores, Inc. The complaint alleges that Guitar Center violated the California Song-Beverly Credit Card Act by requesting that its customers provide personal identification information in connection with the use of their credit cards. The complaint seeks monetary damages including statutory civil penalties in amounts of up to $1,000 per violation. In December 2012, a motion for summary judgment was filed on behalf of Guitar Center. A tentative ruling was issued by the court granting Guitar Center’s motion for summary judgment. The court ordered additional limited discovery. The motion for summary judgment will be heard by the court on November 8, 2013. We are not currently able to estimate a probable outcome or range of loss in this matter.

On March 18, 2013, a putative class action was filed in Los Angeles Superior Court in an action entitled Stewart vs. Guitar Center, Inc. and Guitar Center Stores, Inc. The complaint alleges that Guitar Center allegedly violated California wage and hour laws, including failure to provide required meal periods, rest breaks, unpaid work time, and failure to provide accurate itemized wage statements. Guitar Center has retained defense counsel. Guitar Center has filed a Motion to Abate due to duplicative litigation in the pending Pellanda vs. Guitar Center action. We are not currently able to estimate a probable outcome or range of loss in this matter. This matter will be joined with the Pellanda settlement.

In addition to the matters described above, we are involved in various claims and legal actions in the normal course of business. We expect to defend all unresolved actions vigorously. We cannot assure you that we will be able to achieve a favorable settlement of these lawsuits or obtain a favorable resolution if they are not settled. However, it is management’s opinion that, after consultation with counsel and a review of the facts, a material loss with respect to our financial position, results of operations and cash flows is not probable from such currently pending normal course of business litigation matters.