Company: FOACW
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001828937-25-000061
Chunk: 73

Company: Finance of America Companies Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Item 1
Chunk 73
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 that could affect the amount of the accrued liability that has been previously established. For certain matters, the Company may determine that a loss is not probable but is reasonably possible or may consider a loss to be probable but cannot calculate a precise estimate of losses. For these matters, the Company may be able to estimate a range of possible loss. In determining whether it is possible to provide an estimate of loss or range of possible loss, the Company reviews and evaluates its material litigation and regulatory matters on an ongoing basis, in conjunction with any outside counsel handling the matter. Based on our assessment of the facts and circumstances, we do not believe any of these matters, individually or in 

32

Finance of America Companies Inc.Notes to Condensed Consolidated Financial Statements (Unaudited)

the aggregate, will have a material adverse effect on our financial position, results of operations, or cash flows in a future period. The Company is a defendant in three representative lawsuits alleging violations of the California Labor Code and brought pursuant to the California Private Attorneys General Act (“PAGA”). The cases have been coordinated. On November 4, 2022, the court ordered that each of the plaintiffs’ individual PAGA claims must be arbitrated and that their representative PAGA claims will be stayed pending a ruling by the California Supreme Court in the third-party case Adolph v. Uber Technologies, Inc. On July 17, 2023, the California Supreme Court issued its decision in Adolph, ruling that an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate the representative portion of the PAGA claim. The Company has settled all of the individual arbitration claims for a de minimis amount and is in different stages of the remaining representative PAGA claims. Due to the unpredictable nature of litigation generally, and the wide discretion afforded the Court in awarding civil penalties in PAGA actions, the outcome of these matters cannot be presently determined, and a range of possible losses cannot be reasonably estimated. Although the actions are being vigorously defended, the Company could, in the future, incur judgments or enter into settlements of claims that could have a negative effect on its results of operations in any particular period.Legal expenses, which include, among other things, settlements and the fees paid to external legal service providers, were $0.8 million and $1.1 million for the three and six months ended June 30, 2025, respectively, and $1.8 million and $2.1 million