SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report:  November 23, 2005

Date of earliest event reported:  November 29, 2005

 

H&E EQUIPMENT SERVICES L.L.C.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

 

 

 

Item 2.04               Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

 

To the extent required by Item 2.04 of Form 8-K, the information contained in Item 7.01 of this report is incorporated by reference in this Item 2.04.

 

Item 7.01               Regulation FD Disclosure.

 

As we previously reported, in July 2000, Sunbelt Rentals, Inc. brought claims against us in the General Court of Justice, Superior Court Division, State of North Carolina, County of Mecklenburg alleging, among other things, that in connection with our hiring of former employees of the plaintiff there occurred a misappropriation of trade secrets, unfair trade practices and interference with prospective advantages.  In May 2003, the trial court ruled in favor of the plaintiff in the amount of $17.4 million.  Consequently, we recorded a $17.4 million loss in 2003.  We subsequently appealed the judgment.  In conjunction with the appeal and in accordance with the court’s ruling, we posted and filed an irrevocable standby letter of credit for approximately $20.1 million, representing the amount of the judgment plus $2.7 million in anticipated statutory interest (8%) for the twenty-four months during which the judgment was to be appealed.  In addition, as we previously reported, the Court of Appeals of North Carolina denied our appeal on October 18, 2005.

 

We have decided not to pursue any additional appeals and, on November 23, 2005, entered into a settlement agreement with Sunbelt Rentals, Inc. to pay the full amount of the irrevocable standby letter of credit.  We made this approximately $20.1 million payment on November 28, 2005.

 

This payment of damages does not cause a default or an event of acceleration under our senior secured credit facility, senior secured notes or senior subordinated notes.  The payment does not adversely impact our liquidity, because the payment was funded through our senior secured credit facility and availability under the senior secured credit facility already had been reduced by the amount of the letter of credit.  At the time of payment, the amount of the judgment was reclassified from accrued liabilities to debt under our senior secured credit facility.  This does not result in a net change to total liabilities on our balance sheet.  In addition, this does not adversely impact our balance sheet or statement of operations, because the judgment, including statutory interest through September 30, 2005, has already been reflected on our financial statements.  We have continued to expense statutory interest through the date of payment.

 

Item 9.01               Financial Statements and Exhibits.

 

(c)           Exhibits

 

10.1        Stipulation of Settlement dated November 23, 2005.

 

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SIGNATURES

 

According to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	H&E EQUIPMENT SERVICES L.L.C.
Date: November 29, 2005
	/s/ LESLIE S. MAGEE
	By:	Leslie S. Magee
	Its:	Chief Financial Officer

 

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