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Contingencies | 12 Months Ended
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Dec. 31, 2019
Loss Contingency [Abstract] |
Contingencies | 11. CONTINGENCIES An accrual for estimated legal fees and settlements of $7.3 million and $6.1 million at December 31, 2019 and December 31, 2018, respectively, is presented within other current liabilities on our 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 a party to the following legal proceeding that we consider to be outside the scope of ordinary routine litigation incidental to our business. Oregon Arbitrations. There were approximately 310 individual arbitration claims which were filed before the American Arbitration Association from March through July 2018 against Western Culinary Institute, Ltd. (“WCI”). WCI closed in 2017. These individual arbitrations involved students who attended WCI from approximately 2008 to 2010 and alleged a variety of misrepresentations made by WCI. In September 2019, the Company agreed to settle these claims. The settlement, which is in the form of a class settlement, is for a total amount of $7.1 million which includes all attorneys’ fees and costs. The Company made no admission of liability pursuant to the terms of the settlement. On February 13, 2020 the circuit court in Oregon granted final court approval of the settlement. Payment of the $7.1 million is expected to be made within the next 30 days. Because there were no opt outs from the class, all of the individual claims will be dismissed with prejudice. The Company’s financial statements as of December 31, 2019 reflect a reserve of $7.1 million related to this matter. Other. In addition to the legal proceeding 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.

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- Definition The entire disclosure for legal proceedings, legal contingencies, litigation, regulatory and environmental matters and other contingencies. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 450 -URI http://asc.fasb.org/topic&trid=2127136 + Details
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