Does anyone know how much Apollo Group and University of Phoenix spend on lawsuits and settlements? Apollo Group reports that they do not have any current liabilities from these events. How can that be? I know that University of Phoenix settles almost all of its cases, so how is that reported in the SEC documents?
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FTC had to file court order to try and get documentation they previously requested from UOP and did not receive as part of their investigation. That's why managers were working advisors to death to get accounts ' cleaned' up. Buying time by delaying FTC. Just another nail in coffin ...or brick in the wall... we don't need no education... if you don't eat your meat ..you can't have your pudding. All downhill from here.
It's hard to nail down what category they put lawsuits under; obviously this is their intention as part of their standard operating procedure to keep the 'bad stuff' incognito for the sake of image and getting their buy-out to go through for the big executives to collect golden parachute while they are walking people out the door. Apollo shareholders are voting today on buy-out of entire company, but UOP apparently can be sold separately if the full buy-out is not approved by shareholders. If they keep it complicated enough, no one can figure out what is going on.
APOL/UofPhoenix pushes everything to arbitration. Not sure how liabilities from arbitration are reported. Perhaps APOL/UoP intends to drag the arbitration process out for as long as possible to avoid having to report real numbers??
For what it's worth...not much:
http://smallbusiness.chron.com/happens-company-not-disclose-lawsuit-78241.html
What Happens if a Company Does Not Disclose a Lawsuit?
by Tom Streissguth, Demand Media
According to federal securities law, publicly owned companies must issue regular financial reports. These reports must disclose pending litigation if the company believes a possibility exists that the litigation will have a material effect on its financial results. Failure to disclose a lawsuit can result in sanctions, fines, suspension of trading in company shares, criminal charges and, of course, yet another lawsuit filed on behalf of the shareholders.
SEC Disclosure Rules
The Securities and Exchange Commission requires all companies listed on public stock exchanges to release regular financial reports. If a company is being sued, SEC Regulation S-K Item 103 may require disclosure of the lawsuit on its Form 10-K annual report as well as the Form 10-Q quarterly report. Disclosure means naming all of the parties to the lawsuit, describing the factual basis and giving the date the suit was filed and the amount of damages the plaintiff is seeking.
Nonrequired Disclosure
The SEC does not require disclosure if a legal claim against a company is a routine event the company experiences in the course of business or if the claim represents less than 10 percent of its assets. If a client claims a small loss of wages due to a faulty product made by General Electric, for example, the amount of relief sought would be far less than 10 percent of the company's net assets and by definition would not have a "material adverse effect" on the company. GE would not need to disclose the lawsuit in its quarterly or annual reports or report the outcome.
Disclosure and GAAP Standards
Generally accepted accounting principles (GAAP) are a set of rules in accounting practice used for public and private companies. By GAAP standards, a company must set up a "reserve" for possible losses due to a pending lawsuit, if a loss in the case is probable, the financial loss will have a material effect on the company and the company can estimate the amount of the financial loss. The amount of the reserve is not fixed, but the company must make a reasonable estimate and by SEC rules provide an explanation of the reason if it is unable to do so.
Enforcement Actions
The SEC also requires disclosure of any proceedings by government agencies or any action in which an officer or director of the company, or any shareholder with more than 5 percent ownership, is one of the parties suing the company. Failure to disclose litigation can result in an SEC investigation. If SEC investigators find reasonable cause for an enforcement action, the agency will notify company officers involved in the investigation by filing a "Wells notice." The enforcement action may result in a court in--nction forcing the company to disclose the lawsuit; the SEC may also levy a civil penalty as a condition of settling the matter. Of course, another outcome is possible -- a finding that the company has not violated the regulation.
@The Former, do you know what item it is in the SEC documents or could it be in more than one category? APOL certainly spends a lot of money on "other."
Lawsuit/settlement monies are written into their annual budget. Settlements are basically written off as expenses and paid in advance. Our annual budget projections for 2014 included 10 mil allocated for lawsuits.
I guess they are able to BURY the numbers in a few categories: "student discounts, grants and scholarships" ($45M), "legal and professional obligations" ($24M), and "other" ($53M).