Legal Proceedings
−Removed: Shareholder Derivative Lawsuit
+Added: UMB Bank Lawsuit
+Added: On March 19, 2020, UMB Bank, National Association (“UMB”), the purported indenture trustee for four series of Valaris notes, filed a lawsuit in Harris County District Court in Houston, Texas.
+Added: The lawsuit was filed against Valaris plc, two legacy Rowan entities, two legacy Ensco entities and the individual directors of the two legacy Rowan entities.
+Added: The complaint alleges, among other things, breach of fiduciary duty, aiding and abetting breach of fiduciary duty and fraudulent transfer in connection with certain intercompany transactions occurring after completion of the Rowan merger and the Rowan entities’ guarantee of Valaris’ revolving credit facility.
+Added: In addition to an unspecified amount of damages, the lawsuit seeks to void and undo all historical transfers of cash or other assets from legacy Rowan entities to Valaris and its other subsidiaries and the internal reorganization transaction.
+Added: On August 18, 2020, Valaris and certain of its affiliates entered into the Original RSA, including the noteholders that directed UMB to file the lawsuit.
+Added: Under the Original RSA and the Amended RSA, the lawsuit is stayed by agreement throughout the pendency of the bankruptcy proceeding unless the Original RSA terminates at which point each party reserves its rights to argue whether the case should proceed while in bankruptcy.
+Added: If the Bankruptcy Court confirms a plan based on the transactions set forth in the Original RSA or the Amended RSA, the lawsuit will be dismissed with prejudice.
+Added: On August 24, 2020, the parties filed a joint notice staying the case.
+Added: If the Original RSA terminates and the case in fact proceeds, we are unable to predict the outcome of this matter or estimate the extent to which we may be exposed to any resulting liability.
+Added: Although we do not expect final disposition of this matter to have a material adverse effect on our financial position, operating results and cash flows, there can be no assurance as to the ultimate outcome of the proceedings.
+Added: Shareholder Class Action
On August 20, 2019, plaintiff Xiaoyuan Zhang, a purported Valaris shareholder, filed a class action lawsuit on behalf of Valaris shareholders against Valaris plc and certain of our executive officers, alleging violations of federal securities laws.
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The complaint asserts claims on behalf of a class of investors who purchased Valaris plc shares between April 11, 2019 and July 31, 2019.
−Removed: Under applicable law, the court appointed a lead plaintiff and lead counsel.
−Removed: We anticipate that an amended complaint will be filed in the second quarter of 2020.
−Removed: We strongly disagree and intend to vigorously defend against these claims.
+Added: The court appointed a lead plaintiff and lead counsel.
+Added: The case has now been stayed in light of the Valaris plc bankruptcy filing, with the exception that lead plaintiff may continue efforts to serve certain defendants and may file an amended complaint.
At this time, we are unable to predict the outcome of these matters or the extent of any resulting liability.
−Removed: On January 4, 2016, Petrobras sent a notice to us declaring the drilling services agreement with Petrobras (the "DSA") for VALARIS DS-5, a drillship ordered from Samsung Heavy Industries, a shipyard in South Korea ("SHI"), void effective immediately, reserving its rights and stating its intention to seek any restitution to which it may be entitled.
−Removed: The previously disclosed arbitral hearing on liability related to the matter was held in March 2018.
−Removed: Prior to the arbitration tribunal issuing its decision, we and Petrobras agreed in August 2018 to a settlement of all claims relating to the DSA.
−Removed: No payments were made by either party in connection with the settlement agreement.
−Removed: The parties agreed to normalize business relations, and the settlement agreement provides for our participation in current and future Petrobras tenders on the same basis as all other companies invited to these tenders.
−Removed: No losses were recognized during 2018 with respect to this settlement as all disputed receivables with Petrobras related to the DSA were fully reserved in 2015.
−Removed: See Item 1 “Legal Proceedings” in our quarterly report on Form 10-Q for the quarter ended June 30, 2018 for further information about the DSA dispute.
−Removed: In April 2016, we initiated separate arbitration proceedings in the U.K.
−Removed: against SHI for the losses incurred in connection with the foregoing Petrobras arbitration and certain other losses relating to the DSA.
−Removed: In January 2018, the arbitration tribunal for the SHI matter issued an award on liability fully in our favor.
−Removed: The January 2018 arbitration award provides that SHI is liable to us for $10.0 million or damages that we can prove.
−Removed: We submitted our claim for damages to the tribunal, and the arbitral hearing on damages owed to us by SHI took place during the first quarter of 2019.
−Removed: In May 2019, the arbitration tribunal for the SHI matter awarded us $180.0 million in damages, in addition to the right to claim interest and costs, in connection with this matter.
−Removed: In June 2019, we and SHI filed separate applications with the English High Court to seek leave to appeal the damages awarded.
−Removed: In December 2019, the English High Court denied the parties’ applications for leave to appeal the tribunal’s $180.0 million damages award.
−Removed: Following this decision, the parties reached an agreement and SHI paid us $200.0 million in cash.
−Removed: Collection of this payment resulted in the recognition of a gain of the same amount, which is included in other, net, in our consolidated statement of operations for the year ended December 31, 2019 .
−Removed: This payment, along with the previously disclosed settlement and normalization of our business relationship with Petrobras, concludes our dispute surrounding VALARIS DS-5.
Environmental Matters
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A $482,000 liability related to these matters was included in accrued liabilities and other on our consolidated balance sheet as of December 31, 2020.
−Removed: We currently are subject to a pending administrative proceeding initiated during 2009 by a Spanish government authority seeking payment in an aggregate amount of approximately $3.0 million for an alleged environmental spill originating from VALARIS 5006 while it was operating offshore Spain.
−Removed: Our customer has posted guarantees with the Spanish government to cover potential penalties.
−Removed: Additionally, we expect to be indemnified for any payments resulting from this incident by our customer under the terms of the drilling contract.
−Removed: A criminal investigation of the incident was initiated during 2010 by a prosecutor in Tarragona, Spain, and the administrative proceedings have been suspended pending the outcome of this investigation.
−Removed: In May 2019, we were informed that the criminal investigation has been completed.
−Removed: We have not received any indication from the Spanish government if or when the administrative proceedings will resume.
−Removed: We intend to vigorously defend ourselves in the administrative proceeding and any criminal investigation.
−Removed: At this time, we are unable to predict the outcome of these matters or estimate the extent to which we may be exposed to any resulting liability.
−Removed: Although we do not expect final disposition of this matter to have a material adverse effect on our financial position, operating results and cash flows, there can be no assurance as to the ultimate outcome of the proceedings.
Other Matters
In addition to the foregoing, we are named defendants or parties in certain other lawsuits, claims or proceedings incidental to our business and are involved from time to time as parties to governmental investigations or proceedings, including matters related to taxation, arising in the ordinary course of business.
−Removed: Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, we do not expect these matters to have a material adverse effect on our financial position, operating results and cash flows.
+Added: outcome of such lawsuits or other proceedings cannot be predicted with certainty and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, we do not expect these matters to have a material adverse effect on our financial position, operating results or cash flows.
Mine Safety Disclosures
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.