COMMITMENTS AND CONTINGENCIES	6 Months Ended
Jun. 30, 2019
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	NOTE 16. COMMITMENTS AND CONTINGENCIES Litigation and Regulatory Proceedings In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by our regulators for non-compliance. Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters. On July 23, 2019, SBTS, LLC (“SBTS”) filed a complaint captioned SBTS, LLC vs. NRC Group Holdings Corp. (Civil Action No. 2019-0566-JTL), in the Court of Chancery of the State of Delaware (the “Court of Chancery”) against NRCG, NRC Group and US Ecology (the “Complaint”). In the Complaint, SBTS alleges that (1) the exchange (the “Preferred Exchange”) of the NRCG Series A Preferred Stock pursuant to the Merger Agreement breaches certain provisions of the NRCG Series A Certificate of Designations, (2) the Preferred Exchange would violate Section 242 of the Delaware General Corporation Law (“DGCL”), (3) SBTS would suffer irreparable harm if NRCG and US Ecology are not enjoined from consummating the transactions contemplated by the Merger Agreement and (4) US Ecology had knowledge of the relevant sections of the NRCG Series A Certificate of Designations and still required the Merger Agreement to include the Preferred Exchange. In the Complaint, SBTS requests that the Court of Chancery (1) render a declaratory judgment that (a) the terms of the Merger Agreement violate certain provisions of the NRCG Series A Certificate of Designations, (b) the removal of the NRCG Series A Preferred Stock designee from the NRCG Board violates NRCG’s Certificate of Incorporation and the NRCG Series A Certificate of Designations, and (c) the terms of the Merger Agreement violate Section 242 of the DGCL, (2) enjoin NRCG from convening a vote of its common stockholders to adopt the Merger Agreement, (3) enjoin NRCG and US Ecology from consummating the transactions contemplated by the Merger Agreement, (4) find US Ecology liable for tortious interference with a contract and award SBTS the damages caused by US Ecology’s actions, (5) award SBTS costs and expenses in connection with the action and (6) grant SBTS any such further relief as justice and its cause may require. As previously disclosed, NRCG and US Ecology believe that the allegations in the Complaint are without merit and that the Preferred Exchange of the NRCG Series A Preferred Stock as contemplated in the Merger Agreement is in accordance with the NRCG Series A Certificate of Designations and the DGCL. On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in one employee fatality and injuries to other employees. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. We resumed landfill operations at our Grand View, Idaho facility in first quarter of 2019 and resumed operations of our secondary waste-treatment facility in the second quarter of 2019. Reconstruction of the primary waste-treatment building is currently underway. In addition to conducting our own investigation into the incident, we are fully cooperating with government agencies, including Idaho Department of Environmental Quality (“IDEQ”) and the U.S. Environmental Protection Agency (“USEPA”) to support their comprehensive and independent investigations of the incident. We cannot presently estimate the potential liability related to the incident and, therefore, no amounts related to such claims have been recorded in our financial statements as of June 30, 2019. We have not been named as a defendant in any civil action relating to the incident. As a result of the Occupational Safety and Health Administration’s (“OSHA”) inspection following the incident, OSHA issued a Citation and Notification of Penalty on May 6, 2019. We are currently contesting the Citation and Notification of Penalty before the Occupational Safety and Health Review Commission and the contested penalty is not material. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion, in excess of our deductibles, are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses. The Company received $9.5 million of property-related insurance payments in the first six months of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The Company recognized $9.2 million of property-related insurance recovery gains in the first six months of 2019. The Company is actively working with its insurance companies on comprehensive property and business interruption insurance claims. Although the Company has recognized certain insurance recoveries related to expenses incurred to continue limited operations at the facility, as of June 30, 2019, the Company has neither received nor recognized any business interruption insurance recoveries related to lost profits as a result of lost business or customers. Other than as described above, we are not currently a party to any material pending legal proceedings and are not aware of any other claims that could, individually or in the aggregate, have a materially adverse effect on our financial position, results of operations or cash flows.

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2019

NOTE 16. COMMITMENTS AND CONTINGENCIES

Litigation and Regulatory Proceedings

In the ordinary course of business, we are involved in judicial and administrative proceedings involving federal, state, provincial or local governmental authorities, including regulatory agencies that oversee and enforce compliance with permits. Fines or penalties may be assessed by our regulators for non-compliance. Actions may also be brought by individuals or groups in connection with permitting of planned facilities, modification or alleged violations of existing permits, or alleged damages suffered from exposure to hazardous substances purportedly released from our operated sites, as well as other litigation. We maintain insurance intended to cover property and damage claims asserted as a result of our operations. Periodically, management reviews and may establish reserves for legal and administrative matters, or other fees expected to be incurred in relation to these matters.

On July 23, 2019, SBTS, LLC (“SBTS”) filed a complaint captioned SBTS, LLC vs. NRC Group Holdings Corp. (Civil Action No. 2019-0566-JTL), in the Court of Chancery of the State of Delaware (the “Court of Chancery”) against NRCG, NRC Group and US Ecology (the “Complaint”). In the Complaint, SBTS alleges that (1) the exchange (the “Preferred Exchange”) of the NRCG Series A Preferred Stock pursuant to the Merger Agreement breaches certain provisions of the NRCG Series A Certificate of Designations, (2) the Preferred Exchange would violate Section 242 of the Delaware General Corporation Law (“DGCL”), (3) SBTS would suffer irreparable harm if NRCG and US Ecology are not enjoined from consummating the transactions contemplated by the Merger Agreement and (4) US Ecology had knowledge of the relevant sections of the NRCG Series A Certificate of Designations and still required the Merger Agreement to include the Preferred Exchange.

In the Complaint, SBTS requests that the Court of Chancery (1) render a declaratory judgment that (a) the terms of the Merger Agreement violate certain provisions of the NRCG Series A Certificate of Designations, (b) the removal of the NRCG Series A Preferred Stock designee from the NRCG Board violates NRCG’s Certificate of Incorporation and the NRCG Series A Certificate of Designations, and (c) the terms of the Merger Agreement violate Section 242 of the DGCL, (2) enjoin NRCG from convening a vote of its common stockholders to adopt the Merger Agreement, (3) enjoin NRCG and US Ecology from consummating the transactions contemplated by the Merger Agreement, (4) find US Ecology liable for tortious interference with a contract and award SBTS the damages caused by US Ecology’s actions, (5) award SBTS costs and expenses in connection with the action and (6) grant SBTS any such further relief as justice and its cause may require.

As previously disclosed, NRCG and US Ecology believe that the allegations in the Complaint are without merit and that the Preferred Exchange of the NRCG Series A Preferred Stock as contemplated in the Merger Agreement is in accordance with the NRCG Series A Certificate of Designations and the DGCL.

On November 17, 2018, an explosion occurred at our Grand View, Idaho facility, resulting in one employee fatality and injuries to other employees. The incident severely damaged the facility’s primary waste-treatment building as well as surrounding waste handling, waste storage, maintenance and administrative support structures, resulting in the closure of the entire facility that remained in effect through January 2019. We resumed landfill operations at our Grand View, Idaho facility in first quarter of 2019 and resumed operations of our secondary waste-treatment facility in the second quarter of 2019. Reconstruction of the primary waste-treatment building is currently underway. In addition to conducting our own investigation into the incident, we are fully cooperating with government agencies, including Idaho Department of Environmental Quality (“IDEQ”) and the U.S. Environmental Protection Agency (“USEPA”) to support their comprehensive and independent investigations of the incident. We cannot presently estimate the potential liability related to the incident and, therefore, no amounts related to such claims have been recorded in our financial statements as of June 30, 2019. We have not been named as a defendant in any civil action relating to the incident. As a result of the Occupational Safety and Health Administration’s (“OSHA”) inspection following the incident, OSHA issued a Citation and Notification of Penalty on May 6, 2019. We are currently contesting the Citation and Notification of Penalty before the Occupational Safety and Health Review Commission and the contested penalty is not material. We maintain workers’ compensation insurance, business interruption insurance and liability insurance for personal injury, property and casualty damage. We believe that any potential third-party claims associated with the explosion, in excess of our deductibles, are expected to be resolved primarily through our insurance policies. Although we carry business interruption insurance, a disruption of our business caused by a casualty event, including the full and partial closure of our Grand View, Idaho facility, may result in the loss of business, profits or customers during the time of such closure. Accordingly, our insurance policies may not fully compensate us for these losses.

The Company received $9.5 million of property-related insurance payments in the first six months of 2019 related to the incident at our Grand View, Idaho facility in the fourth quarter of 2018. The Company recognized $9.2 million of property-related insurance recovery gains in the first six months of 2019. The Company is actively working with its insurance companies on comprehensive property and business interruption insurance claims. Although the Company has recognized certain insurance recoveries related to expenses incurred to continue limited operations at the facility, as of June 30, 2019, the Company has neither received nor recognized any business interruption insurance recoveries related to lost profits as a result of lost business or customers.

Other than as described above, we are not currently a party to any material pending legal proceedings and are not aware of any other claims that could, individually or in the aggregate, have a materially adverse effect on our financial position, results of operations or cash flows.