Leases — The Company leases its office facilities and certain equipment under various leases classified as operating leases. Rent expense under operating leases was approximately $6.1 million, $5.3 million, $0.5 million, and $5.9 million for the year ended December 31, 2021 (Successor), for the period from February 1, 2020 through December 31, 2020 (Successor), the period from January 1, 2020 through January 31, 2020 (Predecessor), and for the year ended December 31, 2019 (Predecessor), respectively.

The Company leases certain technology equipment assets under various leases classified as capital leases. The leased equipment is depreciated on a straight-line basis over the lease terms, which range from three to five years. Included in property and equipment, net are capital leases with a cost of $5.0 million and $5.0 million and accumulated depreciation of $4.2 million and $2.5 million as of December 31, 2021 and 2020 (Successor), respectively. The current portion of the capital lease liability is included in accrued liabilities and the long-term capital lease liability is included in other liabilities in the accompanying consolidated balance sheets.

Amortization and interest expense related to capital leases for the year ended December 31, 2021 (Successor), the period from February 1, 2020 through December 31, 2020 (Successor), the period from January 1, 2020 through January 31, 2020 (Predecessor), and for the year ended December 31, 2019 (Predecessor), are as follows (in thousands):


	Successor				Predecessor
	Year Ended December 31, 2021		Period from February 1, 2020 through December 31, 2020		Period from January 1, 2020 through January 31, 2020		Year Ended December 31, 2019
Depreciation and amortization	$	1,441	$	2,282	$	231	$	3,173
Interest expense	$	100	$	206	$	26	$	395

Future minimum rental payments under operating leases that have initial non-cancelable lease terms in excess of one year, future minimum rental payments under capital leases and the present value of minimum lease payments under capital leases as of December 31, 2021 (Successor), are as follows (in thousands):


Years Ending December 31,
	Operating Leases		Capital Leases
2022	$	7,303	$	914
2023		6,110		106
2024		5,354		—
2025		2,124		—
2026		1,653		—
Thereafter		459		—
Total minimum lease payments	$	23,003	$	1,020
Less: Imputed interest				(32	)
Present value of minimum lease payments under capital leases			$	988
Less: Current portion of capital lease liability				(884	)
Total long-term capital lease liability			$	104

Litigation — The Company is involved in litigation from time to time in the ordinary course of business. At times, the Company, given the nature of its background screening business, could become subject to lawsuits, or potential class action lawsuits, in multiple jurisdictions, related to claims brought primarily by consumers or individuals who were the subject of its screening services.

For all pending matters, the Company believes it has meritorious defenses and intends to defend vigorously or otherwise seek indemnification from other parties as appropriate. However, the Company has recorded a liability of $7.9 million and $8.1 million at December 31, 2021 and 2020 (Successor), respectively, for matters that it believes a loss is both probable and estimable. This is included in accrued liabilities in the accompanying consolidated balance sheets.

In June 2014 and September 2015, two separate class action cases were filed against the Company in the State of California. The two cases were coordinated together under a single judge and a single settlement agreement for both cases as coordinated together was approved by the court in December 2021. As a result, the Company has recorded a total liability of $5.5 million and $6.3 million for this settlement agreement at December 31, 2021 and 2020 (Successor), respectively. This liability represents the settlement amount and related class action administrative fees, less certain payments made in December 2021. The remaining settlement amount was paid in February 2022. Additionally, the Company maintains liability insurance programs to manage its litigation risks and the Company’s insurers have agreed to a single deductible to be applied to the two cases. As a result, the Company has recorded a total insurance receivable of $2.1 million and $2.2 million for this settlement agreement at December 31, 2021 and 2020 (Successor), respectively, which represents the portion of the legal settlement and legal fees incurred that was recovered from the Company’s insurers in March 2022. This is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets.

The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable.