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Legal Proceedings and Other Contingencies
6 Months Ended
Jun. 30, 2013
Commitments and Contingencies Disclosure [Abstract]  
Legal Proceedings and Other Contingencies
Legal Proceedings and Other Contingencies
Various legal actions, claims, assessments, and other contingencies arise in the ordinary course of our business and are pending against us. Legal matters are subject to numerous uncertainties and they may be resolved adversely. For a full discussion of our material pending legal matters, please refer to "Note 22. Legal Proceedings and Other Contingencies" of our consolidated financial statements in our Annual Report on Form 10-K/A for the year ended December 31, 2012. Except as noted below, there have been no material changes in our legal matters.
Viareggio Derailment
In June 2009, a train consisting of fourteen liquefied petroleum gas (“LPG”) tank cars owned by GATX Rail Austria GmbH and two of its subsidiaries (collectively, “GRA”) derailed while passing through Viareggio, a city in the province of Lucca, Italy. Five tank cars overturned and one of the overturned cars was punctured by a peg or obstacle along the side of the track, resulting in a release of LPG, which subsequently ignited. Thirty-two people died and others were injured in the fire, which also resulted in property damage. The LPG tank cars were leased to FS Logistica S.p.A., a subsidiary of the Italian state-owned railway, Ferrovie dello Stato S.p.A (the “Italian Railway”).
The public prosecutors of Lucca conducted an investigation of the Viareggio accident, and on February 19, 2013, the Court of Lucca notified GRA, as well as several of its maintenance and supervisory employees (the “Employees”) and an external supervisor, that the public prosecutors were seeking indictments against them for various negligence-based crimes related to the accident, all of which are punishable under Italian law by incarceration, damages and fines. Similar notices were issued to four Italian Railway companies and eighteen of their employees, as well as to the Italian workshop Cima Riparazioni S.p.A. and four of its employees. The public prosecutors assert that a crack in one of the tank car's axles broke, causing the derailment and ultimately resulting in a tank car rupture and release of LPG, after the car hit an obstacle on the side of the track placed there by the Italian Railway. Their report alleges that the crack was detectable at the time of final inspection but was overlooked by the Employees at the workshop owned by GRA's subsidiary, Jungenthal Waggon GmbH. On July 18, 2013, the judge presiding over the preliminary hearing ruled that both GRA and the Employees would proceed to trial. We believe that GRA and its Employees acted diligently and properly with respect to applicable legal and industry standards, and they will present numerous scientific and technical defenses to the public prosecutor's report in the ongoing proceedings.
With respect to claims for personal injuries and property damages arising out of the accident, GATX and its subsidiaries maintain insurance for such losses, and those insurers are working cooperatively with the insurer for the Italian Railway to adjust and settle these claims. These joint settlement efforts have resolved the majority of asserted civil damage claims related to the accident, and joint efforts to resolve the remaining civil claims are ongoing. Notwithstanding these settlement efforts, approximately 120 civil claims were brought in the preliminary hearing proceeding against the Employees by parties seeking recovery for personal injuries and property damages. Civil claimants have received leave from the court to bring such claims against GRA and the employees of the other defendants. Up to the commencement of the trial, such claimants will be permitted to file civil damages claims and join as parties to the proceedings. In addition to the ongoing settlement of civil claims, the insurers also had been providing reimbursement for legal defense costs. One of the eleven insurers has notified us that, with respect to its layer of coverage, it will not reimburse the costs of defense, and another insurer has issued a general reservation of rights. We are engaged in insurance coverage discussions with the insurers to attempt to resolve these issues. We cannot predict the outcome of those discussions or the amount of defense costs that ultimately may not be reimbursed. Additionally, we cannot predict the outcome of the foregoing legal proceedings or what other legal proceedings, if any, may be initiated against GRA or its personnel, and, therefore, cannot reasonably estimate the amount or range of loss (including legal defense costs) that may ultimately be incurred in connection with this accident. Accordingly, we have not established any accruals with respect to this matter.