Contingencies	9 Months Ended
Sep. 30, 2019
Contingencies Disclosure [Abstract]
Contingencies	8. CONTINGENCIES An accrual for estimated legal fees and settlements of $37.5 million and $6.1 million at September 30, 2019 and December 31, 2018, respectively, is presented within current liabilities – other accrued expenses on our condensed consolidated balance sheets. We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued, and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the outcome of pending appeals, motions, or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any. We are, or were, a party to the following legal proceedings that we consider to be outside the scope of ordinary routine litigation incidental to our business. Oregon Arbitrations. There were approximately 310 remaining active individual arbitration claims which were filed against Western Culinary Institute, Ltd. (“WCI”) from March through July 2018, all of which are being administered by the American Arbitration Association. These individual arbitrations involve students who attended WCI from approximately 2008 to 2010. Each arbitration seeks monetary damages and alleges that WCI made a variety of misrepresentations to the individual student filing the arbitration, relating generally to WCI’s placement statistics, students’ employment prospects upon graduation from WCI, the value and quality of an education at WCI, and the amount of tuition students could expect to pay as compared to salaries they could expect to earn after graduation. The institution is no longer in operation and closed in 2017. The Company entered into a letter of intent as of September 26, 2019 to settle these approximately 310 remaining individual arbitration claims. The settlement, which will be in the form of a class settlement, is for a total amount of $7.1 million which includes all attorneys’ fees and costs. On October 9, 2019, a motion to certify the settlement class was filed in circuit court in Oregon. The Company makes no admission of liability pursuant to the terms of the settlement. The settlement is subject to final court approval. Payment of the $7.1 million will be made after final court approval, which the Company currently expects to occur in the first quarter of 2020. Unless they opt out, all claims against the Company alleged in the cases by settlement class members will be dismissed with prejudice. The Company will have the option of withdrawing from the settlement if a specified number of individuals opt out of the settlement. The Company’s financial statements for the quarter ended September 30, 2019 reflect a reserve of $7.1 million related to this matter. The one-time settlement expense is expected to result in substantial net savings for the Company compared to the significant long-term cost of participating in multiple individual arbitrations. FTC. As previously disclosed, on July 26, 2019, the Company and certain operating subsidiaries executed a settlement agreement (the “FTC Agreement”) with the U.S. Federal Trade Commission (“FTC”) to resolve the inquiry commenced by the FTC on August 20, 2015. The FTC Agreement which is in the form of a Stipulation as to Entry of an Order for Permanent Injunction and Monetary Judgment became effective upon its entry as an Order in the United States District Court of the Northern District of Illinois on October 9, 2019. As of September 30, 2019, the Company’s condensed consolidated balance sheet reflects restricted cash of approximately $30.0 million held in an escrow account and a reserve of $30.0 million related to this matter. The escrow account funds were distributed to the FTC after entry of the district court’s Order. Other. In addition to the legal proceedings and other matters described above, we receive informal requests from state attorneys general and other government agencies relating to specific complaints they have received from students or former students which seek information about the student, our programs, and other matters relating to our activities in the relevant state. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal inquiry or investigation into our practices in a particular state. We are also subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or graduates, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. While we currently believe that these additional matters, individually or in aggregate, will not have a material adverse impact on our financial position, cash flows or results of operations, these additional matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position and cash flows.

Contingencies

9 Months Ended

Sep. 30, 2019

8. CONTINGENCIES

An accrual for estimated legal fees and settlements of $37.5 million and $6.1 million at September 30, 2019 and December 31, 2018, respectively, is presented within current liabilities – other accrued expenses on our condensed consolidated balance sheets.

We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued, and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the

outcome of pending appeals, motions, or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any.

We are, or were, a party to the following legal proceedings that we consider to be outside the scope of ordinary routine litigation incidental to our business.

Oregon Arbitrations. There were approximately 310 remaining active individual arbitration claims which were filed against Western Culinary Institute, Ltd. (“WCI”) from March through July 2018, all of which are being administered by the American Arbitration Association. These individual arbitrations involve students who attended WCI from approximately 2008 to 2010. Each arbitration seeks monetary damages and alleges that WCI made a variety of misrepresentations to the individual student filing the arbitration, relating generally to WCI’s placement statistics, students’ employment prospects upon graduation from WCI, the value and quality of an education at WCI, and the amount of tuition students could expect to pay as compared to salaries they could expect to earn after graduation. The institution is no longer in operation and closed in 2017.

The Company entered into a letter of intent as of September 26, 2019 to settle these approximately 310 remaining individual arbitration claims. The settlement, which will be in the form of a class settlement, is for a total amount of $7.1 million which includes all attorneys’ fees and costs. On October 9, 2019, a motion to certify the settlement class was filed in circuit court in Oregon. The Company makes no admission of liability pursuant to the terms of the settlement. The settlement is subject to final court approval. Payment of the $7.1 million will be made after final court approval, which the Company currently expects to occur in the first quarter of 2020. Unless they opt out, all claims against the Company alleged in the cases by settlement class members will be dismissed with prejudice. The Company will have the option of withdrawing from the settlement if a specified number of individuals opt out of the settlement.

The Company’s financial statements for the quarter ended September 30, 2019 reflect a reserve of $7.1 million related to this matter. The one-time settlement expense is expected to result in substantial net savings for the Company compared to the significant long-term cost of participating in multiple individual arbitrations.

FTC. As previously disclosed, on July 26, 2019, the Company and certain operating subsidiaries executed a settlement agreement (the “FTC Agreement”) with the U.S. Federal Trade Commission (“FTC”) to resolve the inquiry commenced by the FTC on August 20, 2015. The FTC Agreement which is in the form of a Stipulation as to Entry of an Order for Permanent Injunction and Monetary Judgment became effective upon its entry as an Order in the United States District Court of the Northern District of Illinois on October 9, 2019. As of September 30, 2019, the Company’s condensed consolidated balance sheet reflects restricted cash of approximately $30.0 million held in an escrow account and a reserve of $30.0 million related to this matter. The escrow account funds were distributed to the FTC after entry of the district court’s Order.

Other. In addition to the legal proceedings and other matters described above, we receive informal requests from state attorneys general and other government agencies relating to specific complaints they have received from students or former students which seek information about the student, our programs, and other matters relating to our activities in the relevant state. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal inquiry or investigation into our practices in a particular state. We are also subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or graduates, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. While we currently believe that these additional matters, individually or in aggregate, will not have a material adverse impact on our financial position, cash flows or results of operations, these additional matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position and cash flows.