XML 32 R24.htm IDEA: XBRL DOCUMENT v3.19.3
Commitments and Contingencies
9 Months Ended
Sep. 30, 2019
Commitments And Contingencies Disclosure [Abstract]  
Commitments And Contingencies Disclosure [Text Block]

Note 18 – Commitments and Contingencies

The Company previously disclosed in its Annual Report filed on Form 10-K, as amended by Form 10-K/A, for the year ended December 31, 2018 that AC Products, Inc. (“ACP”), a wholly owned subsidiary, has been operating a groundwater treatment system to hydraulically contain groundwater contamination emanating from ACP’s site, the principal contaminant of which is perchloroethylene. As of September 30, 2019, ACP believes it is close to meeting the conditions for closure of the groundwater treatment system, but continues to operate this system while in discussions with the relevant authorities. As of September 30, 2019, the Company believes that the range of potential-known liabilities associated with the balance of the ACP water remediation program is approximately $0.1 million to $1.0 million. The low and high ends of the range are based on the length of operation of the treatment system as determined by groundwater modeling. Costs of operation include the operation and maintenance of the extraction well, groundwater monitoring and program management.

The Company previously disclosed in its Annual Report filed on Form 10-K, as amended by Form 10-K/A, for the year ended December 31, 2018 that an inactive subsidiary of the Company that was acquired in 1978 sold certain products containing asbestos, primarily on an installed basis, and is among the defendants in numerous lawsuits alleging injury due to exposure to asbestos. During the nine months ended September 30, 2019, there have been no significant changes to the facts or circumstances of this previously disclosed matter, aside from on-going claims and routine payments associated with this litigation. Based on a continued analysis of the existing and anticipated future claims against this subsidiary, it is currently projected that the subsidiary’s total liability over the next 50 years for these claims is approximately $1.7 million (excluding costs of defense).

As a result of the closing of the Combination on August 1, 2019, the Company is now party to Houghton environmental matters related to certain domestic and foreign properties currently or previously owned, described below. The Company continually evaluates its obligations related to such matters and has estimated the range of costs for all of the Houghton environmental matters to be between approximately $4 million and $5 million as of September 30, 2019, for which $4.8 million is accrued within other current liabilities on the Company’s Condensed Consolidated Balance Sheets as of September 30, 2019.

Houghton’s Sao Paulo, Brazil site was required under Brazilian environmental, health and safety regulations to perform an environmental assessment as a part of a permit renewal process. The site has conducted a multi-year soil and groundwater investigation and corresponding risk assessments based on the result of the investigations. Initial investigations identified soil and ground water contamination in select areas of the site. In 2017, the site had to submit a new 5-year permit renewal request and was asked to complete additional investigations to further delineate the site based on review of the technical data by the local regulatory agency, Companhia Ambiental do Estado de São Paulo (“CETESB”). Based on review of the updated investigation data, CETESB issued a Technical Opinion regarding the investigation and remedial action taken to date. The site developed an action plan and submitted to CETESB in 2018 based on CETESB requirements. The site intervention plan primarily requires the site, amongst other actions, to conduct periodic monitoring for methane in soil vapors, source zone delineation, groundwater plume delineation, bedrock aquifer assessment, update the human health risk assessment, develop a current site conceptual model and conduct a remedial feasibility study and provide a revised intervention plan. In December 2019, the site is required to submit a report on the activities

completed including the revised site conceptual model and results of the remedial feasibility study and recommended remedial strategy for the site.

Other Houghton environmental matters the Company is now party to include participation in certain payments in connection with four currently active environmental consent orders related to certain hazardous waste cleanup activities under the U.S. Federal Superfund statute where Houghton has been designated a potentially responsible party (“PRP”) by the Environmental Protection Agency along with a certain number of other PRPs depending on the site, and other obligations to perform cleanup activities at certain other foreign subsidiaries. These environmental matters primarily require the Company to perform long-term monitoring as well as operating and maintenance at each of the applicable sites.

The Company believes, although there can be no assurance regarding the outcome of other unrelated environmental or other litigation matters, that it has made adequate accruals regarding matters of which it is aware. Approximately $0.2 million was accrued at September 30, 2019 and December 31, 2018, respectively, to provide for such anticipated future environmental assessments, remediation costs and other litigation matters. The Company believes that where it is party to other litigation, it will not have a material adverse effect on the Company’s results of operations, cash flows or financial condition.