v3.26.1
Note L - Litigation
6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

NOTE L: LITIGATION

We are involved in certain claims and pending litigation arising from the ordinary conduct of business. We also provide accruals for claims within our self-insured retention amounts. Since September 1, 2020, we have been self-insured for certain layers of auto liability claims in excess of $2.0 million. We currently specifically reserve for claims that are expected to exceed $2.0 million when fully developed, based on the facts and circumstances of those claims. Based on our knowledge of the facts, and in certain cases, opinions of outside counsel, we believe the resolution of such claims and pending litigation will not have a material effect on our financial position, results of operations or cash flows. However, if we experience claims that are not covered by our insurance or that exceed our estimated claim reserve, it could increase the volatility of our earnings and have a materially adverse effect on our financial condition, results of operations or cash flows. As of June 30, 2026, the Company has recorded a liability of $3.1 million for specific auto claims that may exceed insurance limits, which is included in accrued expenses and other liabilities in the Consolidated Balance Sheets.

 

We were previously a defendant in a motor vehicle accident lawsuit filed on January 10, 2025 in the State Court of Gwinnett County, Georgia, arising from a December 29, 2024 accident between a Company tractor-trailer and a passenger vehicle. During the six months ended June 30, 2026, the Company finalized a settlement agreement with the plaintiff for a total settlement amount of $30.0 million, of which $26.5 million represents the Company’s net exposure after consideration of applicable insurance coverage. The settlement agreement was executed by all parties on March 30, 2026 and resolves all claims related to this matter. The court dismissed the lawsuit on May 21, 2026.

 

During the six months ended June 30, 2026, the Company paid $16.5 million related to this settlement. The remaining payments are expected to be made in accordance with the settlement agreement, with approximately $3.0 million due during the remainder of 2026 and approximately $7.0 million due in 2027.

 

The Company had previously recorded a liability of $26.5 million as of December 31, 2025. As of June 30, 2026, the remaining liability was $10.0 million. This amount is recorded in accrued expenses and other liabilities on the condensed consolidated balance sheets. No adjustments to the previously recorded liability were required during the six months ended June 30, 2026. Accordingly, there is no remaining material exposure related to this matter beyond the unpaid settlement obligation reflected in the Company’s financial statements.