What changed in this filing

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Item 3. Legal Proceedings

2023-03-15 compared with 2022-03-16 · 106 added, 91 removed, 21 unchanged (90% of the section changed)

5 unchanged sentences

allege that resolution as a class action is appropriate.

For the most part, we have

legal and factual defenses to consumer claims, which we routinely contest or settle (for immaterial amounts) depending on the particular

circumstances of each case.

There are as of the date of this report two civil actions that could possibly result in a material liability,

if resolved adversely and on a class basis, as the respective plaintiffs allege would be appropriate.

Following our filing of a

complaint for a deficiency judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim alleging that our

deficiency notices were not compliant with Connecticut law, and seeking relief on behalf of a class of Connecticut obligors whose vehicles

we had repossessed.

The defendant’s contract provided for resolution of disputes exclusively by arbitration, and exclusively on

an individual basis, not a class basis.

For the most part, we have legal and factual defenses to consumer claims, which

we routinely contest or settle (for immaterial amounts) depending on the particular circumstances of each case.

Following our filing of a complaint for a deficiency

judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim alleging that our deficiency notices were

not compliant with Connecticut law, and seeking relief on behalf of a class of Connecticut obligors whose vehicles we had repossessed.

The defendant’s contract provided for resolution of disputes exclusively by arbitration, and exclusively on an individual basis,

not a class basis.

Nevertheless, in August 2021, the court denied our motion to compel arbitration, without opinion.

As of the date of this report, no motion for certification of a class has been filed or granted;

however, it would be reasonable to expect

that resolution of these claims will be on a class basis.

In April 2022, a

motion for certification of a class was filed but has not been ruled upon.

It is reasonable to expect that resolution of these claims

will be on a class basis.

Wage and Hour Claim.

On September 24, 2018, a former employee filed a lawsuit against us in the Superior Court of Orange County, California, alleging that

we incorrectly classified our sales representatives as outside salespersons exempt from overtime wages, mandatory break periods and certain

other employee protective provisions of California and federal law.

The complaint seeks injunctive relief, an award of unpaid wages, liquidated

damages, and attorney fees and interest.

On September 24, 2018,

a former employee filed a lawsuit against us in the Superior Court of Orange County, California, alleging that we incorrectly classified

our sales representatives as outside salespersons exempt from overtime wages, mandatory break periods and certain other employee protective

provisions of California and federal law.

The complaint seeks injunctive relief, an award of unpaid wages, liquidated damages, and attorney

fees and interest.

The plaintiff purports to act on behalf of a class of similarly situated employees and ex-employees.

As of the date of this report, no motion for class certification has been filed or granted.

We believe that our compensation

practices with respect to our sales representatives are compliant with applicable law.

Accordingly, we have defended and intend to continue

to defend this lawsuit.

be no assurance as to the outcomes of the matters described or referenced above.

We record at each measurement date, most recently as

of December 31, 2021, our best estimate of probable incurred losses for legal contingencies, including the matters identified above, and

consumer claims.

The amount of losses that may ultimately be incurred cannot be estimated with certainty.

However, based on such information

as is available to us, we believe that the total of probable incurred losses for legal contingencies as of December 31, 2021 is $3.4 million,

and that the range of reasonably possible losses for the legal proceedings and contingencies we face, including those described or identified

above, as of December 31, 2021 does not exceed $11.3 million.

As of the date

of this report, no motion for class certification has been filed or granted.

We believe that our compensation practices with respect to

our sales representatives are compliant with applicable law.

Accordingly, we have defended and intend to continue to defend this lawsuit.

Massachusetts Civil Investigative

In September 2021, we received a civil investigative demand from the Office of the Attorney General of the Commonwealth of

Massachusetts relating to the Company’s communications with and repossession notices sent to Massachusetts customers.

We are cooperating

with the inquiry.

There can be no assurance as

to the outcomes of the matters described or referenced above.

We record at each measurement date, most recently as of December 31, 2022,

our best estimate of probable incurred losses for legal contingencies, including the matters identified above.

The amount of losses that

may ultimately be incurred cannot be estimated with certainty.

However, based on such information as is available to us, we believe that

the total of probable incurred losses for legal contingencies as of December 31, 2022 is $4.9 million, and that the range of reasonably

possible losses for the legal proceedings and contingencies we face, including those described or identified above, as of December 31,

2022 does not exceed $11.2 million.

Accordingly, we believe that

3 unchanged sentences

the size of the loss or liability imposed and the level of our income for that period.

Mine Safety Disclosures

Not applicable.

Executive Officers of the Registrant

Bradley, Jr .,

62, has been our President and a director since our formation in March 1991, and was elected Chairman of the Board of Directors in July

In January 1992, Mr.

Bradley was appointed Chief Executive Officer.

From April 1989 to November 1990, he served as Chief Operating

Officer of Barnard and Company, a private investment firm.

63, has been our Chief Executive Officer since January 1992, a director since our formation in March 1991, and was elected Chairman of

the Board of Directors in July 2001.

Prior to that he was our President from March 1991 to December 2022.

From April 1989 to November

1990, he served as Chief Operating Officer of Barnard and Company, a private investment firm.

From September 1987 to March 1989, Mr.

was an associate of The Harding

Group, a private investment banking firm.

Bradley does not currently serve on the board of directors of any other publicly-traded

has been Executive Vice President and Chief Financial Officer since March 2014.

Prior to that, he was Senior Vice President and Chief

Financial Officer from April 2006.

He was Senior Vice President of Accounting from August 2004 through March 2006 and served as

a consultant to us from May 2004 to August 2004.

He also served as our Chief Financial Officer from our inception through May 1999.

He is a licensed Certified Public Accountant and has previously practiced public accounting.

has been Executive Vice President and Chief Operating Officer since February 2019, and our Chief Legal Officer from March 2014.

Prior to that, he was our Senior Vice President – General Counsel since March 2013, Senior Vice President and Corporate Counsel

since May 2009 and our Vice President- Legal since joining the Company in November of 2001.

Lavin was previously engaged as

a law clerk and an associate with the San Diego based large law firm (now defunct) of Edwards, Sooy & Byron from 1996 through 2000

and then as an associate with the Orange County based firm of Trachtman & Trachtman from 2000 through 2001.

Lavin also clerked

for the San Diego District Attorney’s office and Orange County Public Defender’s office.

was an associate of The Harding Group, a private investment banking firm.

Bradley does not currently serve on the board of

directors of any other publicly-traded companies.

has been President since December 2022, Chief Operating Officer since February 2019, and our Chief Legal Officer since March 2014.

Prior to that, he was our Executive Vice President since March 2014, Senior Vice President – General Counsel since March 2013, Senior

Vice President and Corporate Counsel since May 2009 and our Vice President- Legal since joining the Company in November of 2001.

Lavin was previously engaged as an associate at a large law firm and a spin off start up law firm.

Danny Bharwani , 55,

has been Chief Financial Officer since September 2022 and Executive Vice President – Finance since December 2022.

Previously, he

was our Senior Vice President – Finance from April 2016 to December 2022 and Vice President – Finance from June 2002 to April

He joined us as Assistant Controller in August 1997.

Bharwani was previously employed as Assistant Controller at The Todd-AO

Corporation, from 1989 to 1997.

Christopher Terry,

54, has been Senior Vice President of Risk Management since May 2017.

Prior to that he was our Senior Vice President of Servicing from

May 2005 to August 2013.

He was Senior Vice President of Asset Recovery from August 2013 to May 2017 and from January 2003 to May

He joined us in January 1995 as a loan officer, held a series of successively more responsible positions, and was promoted to Vice

President - Asset Recovery in June 1999.

Terry was previously a branch manager with Norwest Financial from 1990 to October

55, has been Executive Vice President of Risk Management, Systems, and IT since December 2022.

Prior to that he was our Senior Vice President

of Risk Management, Systems, and IT from October 2018 to December 2022, and Senior Vice President of Risk Management from May 2017 to

October 2018.

Prior to that, he was our Senior Vice President of Servicing from May 2005 to August 2013.

He was Senior Vice President

of Asset Recovery from August 2013 to May 2017 and from January 2003 to May 2005.

He joined us in January 1995 as a loan officer, held

a series of successively more responsible positions, and was promoted to Vice President - Asset Recovery in June 1999.

was previously a branch manager with Norwest Financial from 1990 to October 1994.

Robinson, 60,

has been Senior Vice President of Sales and Originations since June 2020.

Prior to that she was Senior Vice President of Originations

from April 2007 to June 2020.

Prior to that, she held the position of Vice President of Originations since August 1998.

She joined the

Company in June 1991 as an Operations Specialist, and held a series of successively more responsible positions.

has been Executive Vice President of Sales and Originations since December 2022.

Prior to that she was Senior Vice President of Sales

and Originations from June 2020 to December 2022 and Senior Vice President of Originations from April 2007 to June 2020.

Prior to that,

she held the position of Vice President of Originations since August 1998.

She joined the Company in June 1991 as an Operations Specialist,

and held a series of successively more responsible positions.

Previously, Ms.

held an administrative position at Greco & Associates.

Robinson held an administrative position at Greco &

Straten, 56 ,

has been Senior Vice President of Servicing since August 2013.

Prior to that, she was our Senior Vice President of Asset Recovery

from April 2013, and before that she held the position of Vice President of Asset Recovery starting in April 2005.

She started with the

Company in March 1996 as a bankruptcy specialist and took on more responsibility within Asset Recovery over time.

Prior to joining

CPS she worked for the FDIC and served in the United States Marine Corps.

has been Senior Vice President – Product Devlopment since June 2020.

Prior to that he was Senior Vice President – Sales from

March 2014 to June 2020.

Prior to that, he held the position of Vice President – Marketing since April 2010.

He joined the

Company in April 1996 as a loan officer, held a series of successively more responsible positions, and was promoted to Vice President

- Originations in June 2007.

Harton was previously a branch manager with American General Finance from 1990 to March 1996.

Danny Bharwani , 54,

has been Senior Vice President – Finance since April 2016.

Previously, he was our Vice President – Finance from June 2002.

He joined us as Assistant Controller in August 1997.

Bharwani was previously employed as Assistant Controller at The Todd-AO Corporation,

from 1989 to 1997.

has been Executive Vice President of Servicing since December 2022.

Prior to that, she was our Senior Vice President of Servicing

from August 2013 to December 2022 and Senior Vice President of Asset Recovery from April 2013 to August 2013, and before that she held

the position of Vice President of Asset Recovery starting in April 2005.

She started with the Company in March 1996 as a bankruptcy specialist

and took on more responsibility within Asset Recovery over time.

Prior to joining CPS she worked for the FDIC and served in the

United States Marine Corps.

has been Senior Vice President – Business Development since June 2020.

Prior to that he was Senior Vice President – Program

Development from March 2019 to June 2020, Senior Vice President – Marketing from March 2014 to March 2019, and Vice President –

Marketing from April 2010 to March 2014.

He joined the Company in April 1996 as a loan officer, held a series of successively more responsible

positions, and was promoted to Vice President - Originations in June 2007.

Harton was previously a branch manager with American General

Finance from 1990 to March 1996.

Catrina Ralston , 47,

has been Senior Vice President of Human Resources since December 2022.

Prior to that, she was Vice President - Human Resources since March

She joined the Company in 1997 as an Operations Clerk and transferred into the Human Resources Department in 2001 where she held

a series of successively more responsible positions.

Prior to joining CPS, Ms.

Ralston worked as a customer service representative for

the City of Virginia Beach Parks & Recreation Department.

Steve Schween , 60,

has been Senior Vice President of Systems since December 2022.

Previously, he was Vice President of Systems since February 2014.

in the Company in 2000 as a Systems Analyst and took on more responsibility over time.

Schween was previously a Systems Analyst with

Jeunique International.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings