Item 1. Legal Proceedings
Item 1. Legal Proceedings
In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company. While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. The Company accrues legal and other direct costs related to loss contingencies when actually incurred. The Company has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the financial condition, results of operations or liquidity of the Company.
Secondary Containment underneath Gas Processing Units (GPUs), Allegheny, Greene and Washington Counties, Pennsylvania .
On April 1, 2020, the Company received a draft Consent Order and Agreement from the Pennsylvania Department of Environmental Protection (PADEP) claiming that the Company failed to install secondary containment systems in accordance with 25 Pa. Code § 78a.64a(b) underneath 228 GPUs located in southwest Pennsylvania between October 8, 2016 and February 4, 2019. On February 4, 2019, the Company voluntarily disclosed a list of GPUs that did not meet the requirements of 25 Pa. Code § 78a.64a(b) and agreed to begin installing secondary containment systems in compliance with 25 Pa. Code § 78a.64a(b) on all new GPU installations going forward. The draft Consent Order and Agreement, which has not been executed by the Company, requires the Company to pay a civil penalty and continue to install such containment systems, among other things. The Company is in the process of negotiating a resolution of this matter with PADEP. While the Company anticipates that the penalties related to this matter are likely to exceed $100,000, the Company expects that the resolution of this matter will not have a material impact on the financial condition, results of operations or liquidity of the Company.
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