LINCOLN EDUCATIONAL SERVICES CORP 10-K

ITEM 3. LEGAL PROCEEDINGS In the ordinary conduct of our business, we are subject to periodic lawsuits, investigations and claims, including, but not limited to, claims involving students or graduates and routine employment matters. Although we cannot predict with certainty the ultimate resolution of lawsuits, investigations and claims asserted against us, we do not believe that any currently pending legal proceeding to which we are a party will have a material effect on our business, financial condition, results of operations or cash flows. Following a wave of hundreds of class action lawsuits being served upon colleges and universities across the country in connection with transitioning from in-person to online classes due to COVID-19, a class action lawsuit was filed against the Company in New Jersey Federal District Court and served on December 21, 2020. Like most of the other lawsuits across the country, the suit alleges breach of contract, unjust enrichment and conversion. In lieu of an Answer, on January 25, 2021 the Company filed a Motion to Dismiss Plaintiff’s Complaint for Failure to State a Claim. The Motion remains pending before the Court. On February 17, 2021, Plaintiffs’ counsel notified the Company that it would be amending its complaint to address deficiencies the Company outlined in its Motion to Dismiss. As previously reported, on July 6, 2018, the Company received an administrative subpoena from the Office of the Attorney General of the State of New Jersey (“NJ OAG”). Pursuant to the subpoena, the NJ OAG requested certain documents and detailed information relating to the November 21, 2012 Civil Investigative Demand letter addressed to the Company by the Massachusetts Office of the Attorney General (“MOAG”) that resulted in a previously reported Final Judgment by Consent between the Company and the MOAG dated July 13, 2015. The Company responded to this request and, the NJ OAG issued two supplemental subpoenas requesting additional information. The Company has responded to these requests and has received no further communications from the NJ OAG to date. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 34 Index PART II.