On April 13, 2006, Bausch & Lomb Inc. pulled its ReNu contact lens solution from suppliers’ shelves over mounting concerns that the product was linked to over 100 cases of a rare fungal eye infection (Fusarium Keratitis) that could lead to corneal damage and required corneal transplant. In a statement released on April 14, 2006, the Federal Food and Drug Administration indicated its support for the product recall/removal while the Center for Disease Control investigated Bausch & Lomb’s production facilities for possible contamination. On May 9, 2006, the law firm of Weitz & Luxenberg filed a lawsuit against Bausch & Lomb on behalf of a Philadelphia client who was diagnosed with Fusarium Keratitis after using the ReNu product. Discuss how Bausch & Lomb should disclose the pending lawsuit in its 2006 annual report. Discuss the financial effects to Bausch & Lomb’s financial statements associated with the ReNu product recall/removal.