preview

Class-Action Litigation Case

Decent Essays
Open Document

Danle should disclose the class-action litigation. The case states “Danle’s external counsel relating to the two lawsuits that led counsel to believe that Danle could potentially, but not probably, but liable for a percentage of recovery sought by the claimants in those matters”. If it is reasonably possible then Danle would be required to disclose according to the AICPA standards. The only possible way to avoid disclosing the litigation is if and only if it was a remote chance that they would have the judge rule against them, otherwise it needs to be disclosed. Also while Danle doesn’t have an exact percentage of the amount they could pay out, they do have a maximum amount that can potentially be paid out at 50% of the original judgement.

Get Access