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Litigation
9 Months Ended
Sep. 30, 2011
Litigation [Abstract] 
Litigation

 NOTE 12 – LITIGATION

 

In the normal course of business, we may become involved in various legal proceedings. Except as stated below, we know of no pending or threatened legal proceeding to which we are or will be a party which, if successful, might result in a material adverse change in our business, properties or financial condition. However, as with most businesses, we are occasionally parties to lawsuits incidental to our business, none of which are anticipated to have a material adverse impact on our financial position, results of operations, liquidity or cash flows. The Company estimates the amount of potential exposure it may have with respect to litigation claims and assessments.

 

                Rainbow Cycle & Marine & Siloam Springs Cycle, v. Voltage Vehicles, Arkansas Motor Vehicle Commission, Case No. 10-008. On April 1, 2010, Rainbow Cycle & Marine & Siloam Spring Cycle (the "Dealer"), an automobile dealer in the State of Arkansas, submitted a complaint to the Arkansas Motor Vehicle Commission (the "Commission") regarding 6 Xebra® vehicles purchased from ZAP in 2008, for a total purchase price of $65,000.  Due to a concern related to the vehicles raised by the Dealer, the Dealer requested that the Commission order the Company to refund all monies paid by the Dealer to the Company to pay all transportation costs, and in addition to assess penalties and interest charges against ZAP in an unspecified amount.  The Commission issued a Notice of Hearing on August 11, 2010, setting a hearing for September 15, 2010 on the Dealer's Complaint. ZAP responded with a Motion to Dismiss, which the Commission set for hearing on December 15, 2010 and at the same time continued the hearing on the Dealer's Complaint to the same date. After the hearing, the Commission ruled that ZAP was required to refund the Dealer's purchase price for the vehicles and to pay for transportation of the vehicles off of the Dealer's premises. In response, ZAP filed an appeal on April 25, 2011 in Superior Court, State of Arkansas, challenging the Commission's decision. A brief in support of petition for judicial review was filed by ZAP on August 5, 2011 requesting that the decision of the Arkansas Motor Vehicle Commission be reversed and the complaints of the Dealer be dismissed with prejudice and for all other just and proper relief.