Company: CPSS
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001683168-25-003436
Chunk: 25

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 25
---
 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 we filed a cross appeal of the denial of the motion to compel arbitration on October 31, 2024.

     21 

CONSUMER PORTFOLIO SERVICES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

In General.
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 March 31, 2025, 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 range of reasonably possible losses for the legal proceedings and contingencies
we face, including those described or identified above, as of March 31, 2025, does not exceed $3.2 million.

Accordingly,
we believe that the ultimate resolution of such legal proceedings and contingencies should not have a material adverse effect on our consolidated
financial condition. We note, however, that in light of the uncertainties inherent in contested proceedings there can be no assurance
that the ultimate resolution of these matters will not be material to our operating results for a particular period, depending on, among
other factors, the size of the loss or liability imposed and the level of our income for that period. 

(9) Fair Value Measurements

ASC 820, “