What changed in this filing

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Item 3. Legal Proceedings

2024-03-15 compared with 2023-03-15 · 81 added, 46 removed, 81 unchanged (61% of the section changed)

1 unchanged sentence

Consumer Litigation.

We are routinely involved

in various legal proceedings resulting from our consumer finance activities and practices, both continuing and discontinued.

can and do initiate lawsuits against us alleging violations of law applicable to collection of receivables, and such lawsuits sometimes

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.

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.

We are routinely involved in various legal proceedings resulting from our consumer finance activities and practices, both continuing and

discontinued.

Consumers can and do initiate lawsuits against us alleging violations of law applicable to collection of receivables, and

such lawsuits sometimes 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.

Following our filing of a

complaint for a deficiency judgment in the Superior Court at Waterbury, Connecticut, the defendant filed a cross-claim on October 16,

2019 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 complaint seeks primarily damages, injunctive relief, waiver of contract deficiencies,

and attorney fees and interest.

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.

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.

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.

We believe that our compensation practices with respect to our sales representatives are compliant with applicable law.

In August 2023,

the parties settled by agreement the claims of the plaintiff and a California settlement class for $1.1 million and the settlement remains

subject to final court approval.

Massachusetts Civil Investigative

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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.

28, 2023 and without admitting any wrongdoing, the Company entered into an assurance of discontinuance with the Office of the Attorney

General of the Commonwealth of Massachusetts, reflecting the parties’ agreements to settle and fully resolve allegations of the Company’s

noncompliance with Massachusetts law.

The Company agreed to make a payment in the total amount of $1.24 million to an independent trust

for the purposes of making payments to eligible consumers, paying costs of implementation, and paying the Attorney General’s costs

of investigation.

In addition, the Company agreed to pay $75,000 for the fees and costs of a trustee to oversee the trust.

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, 2023, our best estimate of probable incurred losses for legal contingencies, including the matters identified above.

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, 2023 is $3.6 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, 2023 does not exceed $5.6 million.

Accordingly, we believe that

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Not applicable.

Executive Officers of the Registrant

Information about Our Executive Officers

Set forth below are the names, ages, offices held, tenure, and certain

biographical information of each of our executive officers as of the filing of this report:

Bradley, Jr .,

9 unchanged sentences

51, 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.

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

Danny Bharwani , 56, 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.

31 unchanged sentences

United States Marine Corps.

Michele Baumeister ,

57, has been Senior Vice President of Originations since June 2023.

Prior to that she was the Vice President of Originations from March

2017 to June 2023.

She started with the Company in March 1997 as a Loan Processor and held a series of more senior positions within the

Originations Department.

Baumeister was previously a personal banker with Western Financial.

April Crisp , 37, has been the Senior Vice

President of Compliance and Regulatory Affairs since June 2023.

Prior to that, she was the Vice President of Legal from August 2016 to

June 2023, and the Assistant Vice President of Legal from November 2013 to August 2016.

Crisp is a California barred attorney.

Charles Gonel , 43,

has been Senior Vice President of Servicing since June 2023.

Prior to that he was the Vice President of Collections from March 2015 to

He joined the Company in March 2008 as a Collections Analyst and transferred into the Risk Management Department in 2010

where he held a sequence of increasingly more responsible positions.

Prior to joining CPS, he was a Quality Assurance Analyst with AT&T

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

14 unchanged sentences

the City of Virginia Beach Parks & Recreation Department.

Lisette Reynoso , 36,

has been Senior Vice President and General Counsel since June 2023.

Prior to that she was the Vice President of Legal from January 2020

to June 2023, the Assistant Vice President of Legal/Corporate Counsel from December 2018 to January 2020, and Corporate Counsel from December

2015 to December 2018.

Reynoso is a California barred attorney.

Susan Ryan , 52, has

been Senior Vice President of Servicing since June 2023.

Prior to that she was the Vice President of Collections from March 2015 to June

She started with the Company in 2003 as a Deficiency Supervisor where she took on more responsibility over time.

Prior to joining

CPS, she was a Deficiency Supervisor with The Finance Company.

Steve Schween , 61,

has been Senior Vice President of Systems since December 2022.

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

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

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

2 unchanged sentences

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