What changed in this filing

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Item 3. Legal Proceedings

2025-03-11 compared with 2024-03-13 · 94 added, 68 removed, 112 unchanged (59% of the section changed)

2 unchanged sentences

The outcome of litigation, regardless of the merits, is inherently uncertain.

On November 13, 2024, we commenced a voluntary proceeding (the “Prepackaged Chapter 11 Case”) under Chapter 11 of the United States Code, 11 U.S.C.

§§ 101-1532, as amended from time to time (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) under the name In re Vroom, Inc ., Case No.

24-90571 (CML).

On January 8, 2025, the Bankruptcy Court entered an order (a) approving the Debtor’s disclosure statement, (b) confirming the Prepackaged Plan of Reorganization of Vroom, Inc.

under Chapter 11 of the Bankruptcy Code (the “Plan”), and (c) granting related relief.

On January 14, 2025, the conditions to the effectiveness of the Plan were satisfied or waived and the Plan became effective, and the Company emerged from the Prepackaged Chapter 11 Case.

Beginning in March 2021, multiple putative class actions were filed in the U.S.

District Court for the Southern District of New York by certain of the Company’s stockholders against the Company and certain of the Company’s officers alleging violations of federal securities laws.

were captioned Zawatsky et al.

The lawsuits were captioned Zawatsky et al.

et al., Case No.

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All four derivative suits remain in preliminary stages and there have been no substantive developments in any matter.

In April 2022, one of the Company’s stockholders filed a purported shareholder derivative lawsuit on behalf of the Company in the U.S.

In April 2022 and April 2024, two of the Company’s stockholders filed separate purported shareholder derivative lawsuits on behalf of the Company in the U.S.

District Court for the District of Delaware against certain of the Company’s officers and directors, and nominally against the Company, alleging violations of the federal securities law and breaches of fiduciary duty to the Company and/or related violations of Delaware law based on the same general course of conduct alleged in In re:

Securities Litigation.

The case is captioned Godlu v.

The case filed in April 2022 is captioned Godlu v.

Hennessy et al., Case No.

22-cv-569, and the court has approved the parties’ stipulation that the case would remain stayed pending final resolution of In re:

22-cv-569, the case filed in April 2024 is captioned Hudda v.

Hennessy et al.

24-cv-4499., and the court in each has approved the parties’ stipulations that each case would remain stayed pending final resolution of In re:

Securities Litigation.

This lawsuit remains in preliminary stages and there have been no substantive developments.

Both lawsuits remain in preliminary stages and there have been no substantive developments.

The Company expects that the claims asserted in all six of the above derivative suits will be dismissed because the claims asserted in these cases were released by the January 8, 2025 order of the U.S.

Bankruptcy Court for the Southern District of Texas confirming the Company’s plan of reorganization

In January 2022, the Company received a non-public civil investigative demand from the Federal Trade Commission (“FTC”), seeking the production of information related to certain of the Company's business practices and the Company responded to those information requests.

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and the FTC’s Pre-Sale Availability Rule, 16 C.F.R.

The FTC advised the Company that it is authorized to negotiate a stipulated order and the Company intends to work cooperatively with the FTC towards a resolution.

Because the matter is at an early stage and the outcome of any complex legal proceeding is inherently unpredictable and subject to significant uncertainties, the Company cannot determine at present whether any potential liability would have a material adverse effect on the Company’s financial condition, cash flows, or results of operations.

On May 6, 2024, Vroom, Inc., Vroom Automotive, LLC and the FTC reached an agreement to resolve the FTC’s allegations without any admission of wrongdoing by either Vroom entity, subject to final approval by the FTC and the court.

Under the agreement, the Company agreed to pay a total of $1 million in customer redress and abide permanently by an injunction.

The FTC issued its final approval of the agreement on July 2, 2024, and a mutually agreed upon order reflecting the agreement was entered by the Court on July 10, 2024.

The case is captioned Federal Trade Commission v.

et al., Case No.

4:24-cv-02496.

In April 2022, the Attorney General of Texas filed a petition on behalf of the State of Texas in the District Court of Travis County, Texas against the Company, alleging violation of the Texas Deceptive Trade Practices − Consumer Protection Act, Texas Business and Commerce Code § 17.41 et seq., based on alleged deficiencies and other issues in the Company’s marketing of used vehicles and fulfilment of customer orders, including the titling and registration of sold vehicles.

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D-1-GN-001809.

In May 2022, Vroom Automotive, LLC the Attorney General of the State of Texas agreed to a temporary injunction in which Vroom Automotive, LLC agreed to adhere to its existing practice of possessing title for all vehicles it sells or advertises as available for sale on its ecommerce platform.

In December 2023, Vroom, Inc., Vroom Automotive,

LLC and the Attorney General of the State of Texas reached a final agreement to resolve all claims in the petition, without any admission of wrongdoing by either Vroom entity.

Under the agreement, the Company will pay a total of $2 million in civil penalties and $1 million in attorneys' fees, with the first half due in September 2024 and the remaining half due in September 2025, and abide permanently by an injunction of certain operational practices that were previously implemented.

The agreement was approved by the District Court of Travis County on December 13, 2023.

In July 2022 and August 2022, respectively, certain plaintiffs filed two putative class action lawsuits in the District Court of Cleveland County, Oklahoma and the New York State Supreme Court, respectively, against Vroom, Inc., and Vroom Automotive LLC as defendants, alleging, among other things, deficiencies in Vroom’s titling and registration of sold vehicles:

Blake Sonne, individually and on behalf of all others similar situated, v.

Vroom Automotive, LLC and Vroom, Inc., No.

CJ-2022-822 and Emely Reyes Martinez, on behalf of all others similarly situated, v.

Vroom Automotive, LLC and Vroom Inc., No.

The Company removed the cases to the U.S.

District Court for the Western District of Oklahoma (Case No.

22-cv-761) and the U.S.

District Court for the Southern District of New York (Case No.

22-cv-7631), respectively, and filed motions to compel arbitration of all claims in both cases.

In September 2023, Vroom’s motions to compel arbitration were granted in both cases, and the court actions stayed pending the outcome of any arbitration proceeding over the respective plaintiffs’ individual claims.

On February 9, 2024, the parties filed a joint stipulation to dismiss the Sonne matter with prejudice.

As previously disclosed, we have been subject to audits, requests for information, investigations and other inquiries from our regulators relating to increased customer complaints concerning the same or similar matters alleged in the State of Texas petition.

In May 2022, Vroom Automotive, LLC and the Attorney General of the State of Texas agreed to a temporary injunction in which Vroom Automotive, LLC agreed to adhere to its existing practice of possessing title for all vehicles it sells or advertises as available for sale on its ecommerce platform.

In December 2023, Vroom, Inc., Vroom Automotive, LLC and the Attorney General of the State of Texas reached a final agreement to resolve all claims in the petition, without any admission of wrongdoing by either Vroom entity.

Under the agreement, the Company agreed to pay a total of $2 million in civil penalties and $1 million in attorneys' fees, with the first half due in September 2024 and the remaining half due in September 2025, and abide permanently by an injunction of certain operational practices that were previously implemented.

As previously disclosed, the Company has been subject to audits, requests for information, investigations and other inquiries from its regulators.

These regulatory matters could continue to progress into legal proceedings as well as enforcement actions.

We have incurred fines in certain states and could continue to incur fines, penalties, restitution, or alterations in our business practices, which in turn, could lead to increased business expenses, additional limitations on our business activities and further reputational damage, although to date such expenses have not had a material adverse effect on the Company’s financial condition, cash flows, or results of operations.

The Company has incurred fines in certain states and could continue to incur fines, penalties, restitution, or alterations in the Company's business practices, which in turn, could lead to increased business expenses, additional limitations on the Company's business activities and further reputational damage, although to date such expenses have not had a material adverse effect on the Company’s financial condition, cash flows, or results of operations.

Mine Safety Disclosures

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Chairperson of the Board

Vice Chair of the Board

O'Shaughnessy

Chief Executive Officer, Director, and President and Chief Executive Officer of UACC

Agnieszka Zakowicz

Chief Financial Officer

Patricia Moran

Chief Legal Officer and Secretary

Chief People and Culture Officer

Anna-Lisa Corrales

Chief Legal Officer, Chief Compliance Officer and Secretary

UACC Chief Financial Officer

has served as a member of our Board of Directors since September 2015 and Independent Executive Chair of the Board since May 2022.

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He currently serves as the Chair of the board of directors and a member of the compensation committee of Booking Holdings, Inc.

Mylod is also a member of the board of directors of several private companies.

Mylod has also served as a member of the board of directors and of the audit committee of Redfin Corporation, an online real estate company, from August 2016 to May 2022.

He is also a member of the board of directors of several private companies.

Mylod holds a Bachelor of Arts in English from the University of Michigan and a Master of Business Administration from the University of Chicago Booth School.

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Mylod’s experience as a venture capital investor and a senior finance executive, including having served as the chief financial officer and vice chairman of a large publicly traded online services provider, qualifies him to serve on our Board of Directors.

Krakowiak has served as a Director and Vice Chair of the Board of Vroom since May 2024.

Prior to that Mr.

Krakowiak was Chief Financial Officer and Treasurer of Vroom from September 2021 to May 2024.

Prior to that he served as Chief Financial Officer and Treasurer of Stoneridge Corporation since August 2016 and was appointed as Executive Vice President in October 2018.

Prior to joining Stoneridge, Mr.

Krakowiak served as Vice President, Treasurer and Investor Relations at Visteon Corporation from 2012 until August 2016.

Prior to that, Mr.

Krakowiak held various financial positions at Owens Corning from 2005 to 2012.

Krakowiak holds Bachelor of Science and Master of Science degrees in Electrical Engineering from the University of Michigan and an M.B.A.

from the University of Chicago Booth School of Business.

We believe that Mr.

Krakowiak's experience as our former Chief Financial Officer, along with his extensive financial, automotive industry and leadership experience, qualifies him to serve on our Board of Directors.

Crow has served on our Board of Directors since October 2022.

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Prior to that, Mr.

Crow served as Senior Vice President, Human Resources of Kmart Corporation, a leading general merchandise retailer, from May 1999 through May 2002.

Crow served as Senior Vice President, Human Resources of

Kmart Corporation, a leading general merchandise retailer, from May 1999 through May 2002.

Crow previously served as a director of Milacron Holdings, Corp., a global leader in the plastic technology and processing industry, where he chaired its Leadership Development and Compensation Committee, and currently serves as a director of a number of private companies.

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We believe Mr.

Farello’s experience in

private equity investments and expertise in the consumer sector, along with his service as a director at numerous companies, qualifies him to serve on our Board of Directors.

Farello’s experience in private equity investments and expertise in the consumer sector, along with his service as a director at numerous companies, qualifies him to serve on our Board of Directors.

Lang has served on our Board of Directors since May 2020.

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Lang currently serves as a member of the board of directors and the talent and compensation and finance committees of V.

Corporation, an international apparel and footwear company, and a member of the board of directors and chair of the compensation committee of Oscar Health Inc., a health insurance company built on a technology platform.

Corporation, an international apparel and footwear company, and a member of the board of directors and chair of the compensation committee and member of the audit committee of Oscar Health Inc., a health insurance company built on a technology platform, since 2022.

She previously served as a member of the board of directors of Care.com Inc.

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Since December 2022, Ms.

O'Shaughnessy has served as the Chief Marketing Officer and Co-Founder of Picnic Group, a data-driven consumer packaged goods company where she oversees the scaling of founder-created consumer packaged food brands.

Prior to The Picnic Group, Ms.

O’Shaughnessy was a strategic growth and operations consultant for a number of direct to consumer brands.

Previously she was the Chief Executive Officer of SocialCode, LLC (now named Code3), a technology company that manages digital and social advertising for leading consumer brands, which she co-founded in 2009 and led until August 2020.

O’Shaughnessy currently serves as a member of the board of directors and of the audit committee and governance committee of Acuity Brands, and on the boards of directors of two nonprofits in Washington, D.C.

O’Shaughnessy is a strategic growth and operations consultant for a number of direct-to-consumer brands.

Previously she was the Chief Executive Officer of SocialCode, LLC, a technology company that manages digital and social advertising for leading consumer brands, which she co-founded in 2009 and led until August 2020.

In addition, Ms.

O’Shaughnessy oversaw business development and product strategy for the Slate Group, an online publisher, where she specialized in advertising product development and strategic partnerships.

O’Shaughnessy currently serves as a member of the board of directors and of the audit committee and governance committee of Acuity Brands, and on the boards of directors of a nonprofit in Washington, D.C.

O’Shaughnessy holds a Bachelor of Arts in Economics from the University of Chicago and a Master of Business Administration from the MIT Sloan School of Management.

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O’Shaughnessy’s extensive leadership experience, including serving in a chief executive officer role, and digital and technology expertise, qualifies her to serve on our Board of Directors.

Matthew Pietroforte has served on our Board of Directors since January 2025.

He is a Managing Director & Senior Analyst at Mudrick Capital Management, L.P., where he is responsible for analyzing special situation opportunities across a diverse range of industries.

Prior to joining Mudrick Capital Management, L.P., Mr.

Pietroforte was a Principal at Davidson Kempner Capital Management from 2015 to 2019 where he evaluated special situation investment opportunities.

Previously, Mr.

Pietroforte worked as an investment banker in the financial restructuring advisory groups at Centerview Partners and Miller Buckfire.

He served on the board of directors at Mudrick Capital Acquisition Corporation II from April 2022 to September 2022.

Pietroforte holds a Bachelor of Arts from Amherst College with a double major in Economics and Psychology, and a Master of Business Administration from the Wharton School at the University of Pennsylvania.

We believe Mr.

Pietroforte's financial sophistication, capital market expertise, and extensive experience investing in a number of privately and publicly held companies, qualify him to serve on our Board of Directors.

Pretlow has served on our Board of Directors since April 2021.

Pretlow is a former Senior Vice President of The Capital Group, an investment management firm, where she led the public fund business development and client relationship group and was also responsible for large client relationships from 1999 until 2011.

Pretlow is a former Senior Vice President of The Capital Group, an investment management firm, where she led the public fund business development and client

relationship group and was also responsible for large client relationships from 1999 until 2011.

Prior to joining The Capital Group, she worked for Montgomery Asset Management and Blackrock (formerly Barclays Global Investors).

She is a member of the board of directors and serves on the audit and finance committee of Williams-Sonoma, Inc.

She was a member of the board of directors and was the audit and finance committee chair of Williams-Sonoma, Inc.

from August 2021 to June 2024.

She is also a member of the board of directors of Greenlight Financial Technology, Inc., where she serves on the audit committee.

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Shortt has served as the Company's Chief Executive Officer since May 2022 and previously served as the Company's Chief Operating Officer from January 2022.

Since March 1, 2024, Mr.

Shortt has also served as President and Chief Executive Officer of UACC.

Prior to joining Vroom, Mr.

Shortt served as Senior Vice President at Walmart Inc.

("Walmart") starting in 2018, where he developed a comprehensive ecommerce supply chain strategy and led improvements through advanced analytics, processes, and systems.

("Walmart") starting in 2018, where he developed the ecommerce supply chain strategy and led improvements through the use of analytics, processes and systems.

Prior to his time at Walmart, Mr.

Shortt served as Senior Vice President of Supply Chain at The Home Depot, Inc.

starting in 2013, and previously held senior leadership roles overseeing supply chain, fulfillment and logistics, with an emphasis on change management and business transformation, at ACCO Brands Corporation, Unisource Worldwide, Inc., Fisher Scientific International, Inc.

starting in 2013, and previously held senior leadership roles with an emphasis on change management and business transformation, at ACCO Brands Corporation, Unisource Worldwide, Inc., Fisher Scientific International, Inc.

and Office Depot, Inc.

1 unchanged sentence

We believe that Mr.

Shortt’s service as our chief executive officer and his expertise in supply chain, logistics, data analytics and change management qualifies him to serve on our Board of Directors.

Krakowiak has served as Chief Financial Officer and Treasurer of Vroom since September, 2021.

Prior to that he served as Chief Financial Officer and Treasurer of Stoneridge Corporation since August 2016 and was appointed as Executive Vice President in October 2018.

Prior to joining Stoneridge, Mr.

Krakowiak served as Vice President, Treasurer and Investor Relations at Visteon Corporation from 2012 until August 2016.

Prior to that, Mr.

Krakowiak held various financial positions at Owens Corning from 2005 to 2012.

Krakowiak holds Bachelor of Science and Master of Science degrees in Electrical Engineering from the University of Michigan and an M.B.A.

from the University of Chicago Booth School of Business.

Patricia Moran has served as our Chief Legal Officer and Secretary since January 2019.

Shortt’s service as our chief executive officer and his expertise in transformation, ecommerce, operations, supply chain, data analytics and change management qualifies him to serve on our Board of Directors.

Agnieszka Zakowicz has served as the Chief Financial Officer and Treasurer of Vroom since May 2024.

Prior to that, she served as Senior Vice President and Principal Accounting Officer of Vroom since July 2022, and as Vice President of SEC Reporting and Accounting Policy since August 2020, where she was responsible for financial reporting, technical accounting and SOX compliance.

Previously, Ms.

Moran was a Managing Director, Chief Legal Officer and Secretary of Greenhill & Co.

Inc., a publicly traded, global independent investment bank, from April 2014 to October 2016, and a Senior Advisor from November 2016 to April 2017.

Prior to joining Greenhill, Ms.

Moran was a Partner at Skadden, Arps, Slate, Meagher & Flom LLP, a leading global law firm where she had a 30-year career and chaired the New York office Diversity Committee.

Moran has broad experience in corporate governance and corporate transactions, including mergers and acquisitions, private equity, joint ventures, restructurings and corporation finance.

Moran holds a Bachelor of Science from the University of Scranton and a Juris Doctor from the Villanova University School of Law.

Denise Stott has served as our Chief People and Culture Officer since November 2016.

Zakowicz served as Senior Director of Accounting Policy since joining the Company in January 2019.

Prior to joining the Company, Ms.

Zakowicz worked as a Director in the Capital Markets and Accounting Advisory Practice at PricewaterhouseCoopers LLP for 18 years, where she assisted various clients with the financial reporting aspects of capital market transactions and technical accounting.

Zakowicz holds a Bachelor’s Degree from the Warsaw School of Economics.

Anna-Lisa Corrales has served as the Company's Chief Legal Officer, Chief Compliance Officer, and Secretary since August 2024.

Prior to that, she served as the Company's Chief Compliance Officer since April 2023 and as Vice President of Legal Affairs, Compliance since December 2019.

Previously, Ms.

Stott was Senior Vice President of Human Resources at Undertone, a digital advertising company, from May 2013 to October 2016.

Stott’s tenure at Undertone included leading the human resources function through multiple transformations including acquisitions and the eventual sale to a public company.

From February 2010 until she joined Undertone, Ms.

Stott was Vice President of Human Resources at Yodle, a leader in local online marketing, where she led people development through a focus on talent acquisition, employee engagement, employee training and compensation and benefits.

Stott also served as Senior Vice President of Human Resources for ZenithOptimedia, a media and advertising services provider, from August 2007 to July 2009.

Stott holds a Bachelor of Science in Mathematical Economics from Tulane University and a Master of Business Administration from Vanderbilt University.

Corrales was the General Counsel and Corporate Secretary of Jaguar Land Rover North America from 2008 to 2019.

She also spent several years in private practice at the law firms of Frankfurt Kurnit Klein & Selz and Paul Weiss Rifkind Wharton & Garrison.

From 2002 to 2003, Ms.

Corrales served as a law clerk to the Honorable Ronald L.

Ellis in the U.S.

District Court for the Southern District of New York.

Corrales holds a Bachelor of Arts from Duke University and a Juris Doctor from New York University School of Law.

Jon Sandison has served as the Chief Financial Officer of UACC since February 2024.

Prior to that, he served as the Vice President of Investor Relations and Financial Planning & Analysis at Vroom, after starting at the Company in October 2022.

Previously, Mr.

Sandison led global Financial Planning & Analysis at Stoneridge, Inc., from 2017 to 2022.

He also held leadership roles in Treasury and Financial Planning & Analysis at Yazaki North America from 2015 to 2017 and leadership roles in Commercial and Community Banking at J.P.

Morgan Chase from 2009 to 2015.

Sandison holds a Bachelor of Business Administration from Wayne State University.

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