Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 52

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 52
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, Virginia; Maitland, Florida; and Oak
Brook, Illinois. The termination dates of such leases range from 2025 to 2031. The annual base rent for these facilities total approximately
$1.4 million.

Item 3.  Legal Proceedings

Consumer Litigation.
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 2024 a motion for certification of a class was filed. Prior to the motion being ruled upon, summary judgment was granted in our
favor, disposing of the claims against CPS. An appeal of the summary judgment ruling was filed on October 25, 2024 and a cross appeal
of the denial of the motion to compel arbitration was filed on October 31, 2024.

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 sought injunctive relief, an award of unpaid wages,
liquidated damages, and attorney fees and interest. The plaintiff purported to act on behalf of a class of similarly situated employees
and ex-employees. We believe that our compensation practices with respect to our sales representatives are compliant with applicable law.
In August 2023,