Commitments and Contingencies

6 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies Disclosure [Text Block]

Note 19 – Commitments and Contingencies

The Company previously disclosed in its 2020 Form 10-K 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 June 30, 2021, 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 June 30, 2021, 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 2020 Form 10-K 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 three and six months ended June 30, 2021, 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 $

0.4

 million (excluding costs of defense).

The Company previously disclosed in its 2020 Form 10-K that it is party to certain environmental matters related to certain

domestic and foreign properties currently or previously owned by Houghton. These environmental matters primarily require the

Company to perform long-term monitoring as well as operating and maintenance at each of the applicable sites. During the three and

six months ended June 30, 2021, there have been no significant changes to the facts or circumstances of these previously disclosed

matters, aside from on-going monitoring and maintenance activities and routine payments associated with each of the sites. The

Company continually evaluates its obligations related to such matters, and based on historical costs incurred and projected costs to be

incurred over the next 28 years, has estimated the present value range of costs for all of the Houghton environmental matters, on a

discounted basis, to be between approximately $

5.5

 million and $

6.5

 million as of June 30, 2021, for which $

6.0

 million was accrued

within other accrued liabilities and other non-current liabilities on the Company’s Condensed Consolidated Balance Sheet as of June

30, 2021. Comparatively, as of December 31, 2020, the Company had $

6.0

 million accrued for with respect to these matters.

The Company believes, although there can be no assurance regarding the outcome of other unrelated environmental matters, that

it has made adequate accruals for costs associated with other environmental problems of which it is aware. Approximately $

0.1

million was accrued as of both June 30, 2021 and December 31, 2020, to provide for such anticipated future environmental

assessments and remediation costs. 

The Company previously disclosed in its 2020 Form 10-K that one of the Company’s subsidiaries received a notice of inspection

from a taxing authority in a country where certain of its subsidiaries operate which related to a non-income (indirect) tax that may be

applicable to certain products the subsidiary sells. To date, the Company has not received any assessment from the authority related to

potential liabilities that may be due from the Company’s subsidiary. Consequently, there is substantial uncertainty with respect to the

Company’s ultimate liability with respect to this indirect tax, as the application of this tax in its given market is ambiguous and

interpreted differently among other peer companies and taxing authorities. The Company, with assistance from independent experts,

has performed an evaluation of the applicability of this indirect tax to the Company’s subsidiaries in this country. During the six

months ended June 30, 2021 and through the date of this Report, there have been no significant changes to the facts or circumstances

of this previously disclosed matter, aside from on-going discussions between the Company and the taxing authority related to this

notice of inspection and independent testing conducted by third-party consultants at the direction of the Company and the taxing

authority to determine if the Company’s products have contents which subject them to this indirect tax. Based on all of the

information available to the Company at this time, as of June 30, 2021, the Company has recorded a liability of $

1.8

 million in other

accrued liabilities, which reflects the Company’s current best estimate of probable indirect tax owed, including interest and taking into

account applicable statutes of limitations. Because these amounts in part relate to a Houghton entity acquired in the Combination and

for periods prior to the Combination, the Company has submitted an indemnification claim with Houghton’s former owners related to

this potential indirect tax liability. The Company recorded a receivable in other assets for approximately $

1.1

 million, which reflects

the amount of the initial recorded liability for which the Company anticipates being indemnified. As noted, the Company believes

there is substantial uncertainty with respect to its ultimate liability given the ambiguous application of this indirect tax. At this time,

the Company’s current best estimate of a potential range for possible assessments, including additional amounts that may be assessed

under these indirect tax laws, would be $

0

 to approximately $

40

 million, which is net of approximately $

11

 million of estimated

income tax deductions and approximately $

22

 million of applicable rights to indemnification from Houghton’s former owners.

During the first six months of 2021, one of the Company’s Brazilian subsidiaries received a notice that it had prevailed on an

existing legal claim in regard to certain non-income (indirect) taxes that had been previously charged and paid. The matter

specifically relates to companies’ rights to exclude the state tax on goods circulation (a valued-added-tax or VAT equivalent, known in

Brazil as “ICMS”) from the calculation of certain additional indirect taxes (specifically the program of social integration (“PIS”)

and contribution for the financing of social security (“COFINS”)) levied by the Brazilian States on the sale of goods. In May 2021,

the Brazilian Supreme Court concluded that ICMS should not be included in the tax base of PIS and COFINS, and confirmed the

methodology for calculating the PIS and COFINS tax credit claims to which taxpayers are entitled. The Company’s Brazilian entities

had previously filed legal or administrative disputes on this matter and are entitled to receive tax credits and interest dating back to

five years preceding the date of their legal claims. As a result of these court rulings in the first six months of 2021, the Company

recognized non-income tax credits of

67.0

 million BRL or approximately $

13.3

 million, which includes approximately $

8.4

 million

for the PIS and COFINS tax credits as well as interest on these tax credits of $

4.9

 million. The tax credits to which the Company’s

Brazilian subsidiaries are entitled are claimable once registered with the Brazilian tax authorities and the Company anticipates

completing this step during the second half of 2021. These tax credits can be used to offset future Brazilian federal taxes and the

Company currently anticipates using the full amount of credits during the five year period of time permitted. 

In connection with obtaining regulatory approvals for the Combination, certain steel and aluminum related product lines of

Houghton were divested on August 1, 2019. In July 2021, the entity that acquired these divested product lines submitted an

indemnification claim for certain alleged losses in accordance with the terms of the Asset Purchase Agreement (“APA”) . Under the

terms of the APA, the Company has 45 days to review the claim and respond , and as such, the Company is in the early stages of

evaluating the merits of the alleged losses in the indemnification claim received. As of the date of this Report, the Company does not

believe it is reasonably possible to determine or quantify any possible exposure. 

The Company is party to other litigation which management currently believes will not have a material adverse effect on the

Company’s results of operations, cash flows or financial condition. In addition, the Company has an immaterial amount of contractual

purchase obligations.