Commitments and Contingencies
Environmental
We are subject to federal, state, local, and foreign environmental laws and regulations concerning, among other matters, waste water effluents, air emissions, and handling and disposal of hazardous materials, such as cleaning fluids. We are involved with environmental compliance, investigation, monitoring, and remediation activities at certain of our owned and formerly owned manufacturing facilities, and, except for these continuing remediation efforts, believe we are currently in substantial compliance with all known environmental regulations. Undiscounted accrued reserves at December 31, 2025 and 2024 were not material.
Legal Proceedings
Ordinary Course Litigation: We are occasionally subject to various legal claims related to performance under contracts, product liability, taxes, employment matters, environmental matters, intellectual property, and other matters incidental to the normal course of our business. Based on our historical experience in litigating these claims, as well as our current assessment of the underlying merits of the claims and applicable insurance, if any, management believes that the final resolution of these matters will not have a material adverse effect on our financial position, liquidity, cash flows, or results of operations. Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that
certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made.
Supplemental Disclosure: Following the announcement of the Merger Agreement, two lawsuits — captioned McDaniels v. Chart Industries, Inc. et al., 655434/2025 and Johnson v. Chart Industries, Inc. et al., 655438/2025 — were filed on September 11, 2025 in the Supreme Court of the State of New York by purported Chart stockholders, each naming Chart and the members of its board of directors as defendants (the “Complaints”). The Complaints claim that the Definitive Proxy Statement is materially incomplete and misleading under New York law, and seek injunctive relief, damages and costs, among other remedies. Chart has also received demand letters from multiple stockholders threatening litigation and/or making other demands relating to the Merger, including demands for additional disclosures. Although Chart cannot predict the outcome or estimate the possible loss or range of loss from these matters, Chart and its directors believe that the allegations contained in the Complaints and demand letters are without merit, that no supplemental disclosures are required or necessary under applicable law, and that the requested disclosures are immaterial.
However, in order to reduce the risk of the demand letters or Complaints delaying the Special Meeting or the closing of the Merger, and to minimize the nuisance and expense of defending against any litigation, and without admitting any liability or wrongdoing, on September 25, 2025, Chart filed a Form 8-K to update and supplement the Definitive Proxy Statement with additional disclosures relating the Merger (the “Supplemental Disclosures”). Thereafter, the attorney representing the stockholders who filed the Complaints acknowledged that the Supplemental Disclosures mooted the claims raised in the Complaints in their entirety and confirmed that they will seek a mootness fee in connection with the Supplemental Disclosures. The Complaints will remain pending while the forthcoming mootness fee demand is resolved. Chart maintains that none of the Supplemental Disclosures are material. Nevertheless, resolution of these matters may involve payments by Chart to the stockholders’ attorneys that filed the Complaints and/or submitted the demand letters.