PAMT CORP Commitments Disclosure

16.	COMMITMENTS AND CONTINGENCIES

 

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. Except as described below, 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.

 

We are 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. As of December 31, 2025, we reached a preliminary 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 is subject to final approval, which is currently expected during the first quarter of 2026. As of December 31, 2025, the Company has recorded a liability of $26.5 million related to this matter, which is included in accrued expenses and other liabilities in the Consolidated Balance Sheets (see Note 5, Accrued Expenses and Other Liabilities).