Commitments and contingencies |
6 Months Ended |
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Jun. 30, 2026 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and contingencies | 8. Commitments and contingencies Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could be decided unfavorably against us. Environmental laws and regulations Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Matters to be disclosed are as follows: The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. At June 30, 2026, our accrued obligation under this order is $2.2 million, which is calculated based on expected cash payments discounted at rates ranging from 3.9% to 5.0% between 2026 and 2045. The undiscounted amount of that obligation is $3.4 million. We are indemnified against any losses incurred in this matter as stipulated through the agreement and guaranty referenced in our Annual Report. In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At June 30, 2026, our balance sheet includes a liability of $0.9 million for remediation and monitoring costs. That liability is estimated primarily on discounted expected remediation payments and is not materially different from its undiscounted amount. Manufacture and sale of products Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings. We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements. We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. Litigation The Company and certain current and former officers and directors were named as defendants in two putative securities class action lawsuits filed in the U.S. District Court for the Eastern District of Pennsylvania on October 30, 2025, and November 25, 2025, respectively. The cases were subsequently consolidated and transferred to the U.S. District Court for the District of Delaware, styled as In re Avantor, Inc. Securities Litigation. Lead plaintiffs filed an amended consolidated complaint on April 24, 2026. The amended complaint alleges violations of Sections 10(b), 20(a), and 20A of the Securities Exchange Act and Rule 10b-5 related to alleged misleading or false statements concerning Avantor’s competitive position, goodwill, and various aspects of the Company’s business, organization, operations, and management. The amended complaint seeks unspecified damages, attorneys’ fees, and other relief. On July 9, 2026, defendants filed a motion to dismiss. The Company disputes the claims and intends to vigorously defend against them. Two related shareholder derivative cases, Murray v. Stubblefield et al. and Huston v. Stubblefield, et al., were also filed by Avantor shareholders, putatively on behalf of the Company against certain current and former officers and directors. The derivative cases have also since been consolidated before the U.S. District Court for the District of Delaware, styled as In re Avantor, Inc. Derivative Litigation, and purport to assert claims based on similar allegations against the individual defendants for alleged violations of Section 14(a) of the Securities Exchange Act and Rule 14a-9, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste. The complaints seek damages from the individual defendants, attorneys’ fees, and other relief. At this time, the outcome of these matters cannot be predicted. Management does not believe a loss is probable and, therefore, cannot reasonably estimate the possible loss or range of loss, if any, at this time. As of June 30, 2026, there are no outstanding litigation or unasserted matters that we believe will result in material losses.
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