Item 1.01. Entry Into a Material Definitive Agreement. As previously reported, on December 1, 2025, American Bridge Company (“American Bridge”), a wholly-owned subsidiary of Southland Holdings, Inc. (“Southland”) received an adverse ruling in the case of American Bridge Company v. Clark/Lewis Joint Venture (“Clark/Lewis”), et al. relating to the Washington State Convention Center project (the “WSCC Project”).…
Filed Aug 27, 2026Accepted Aug 27, 2026, 5:00 PM EDTCIK 1883814Accession 0001829126-26-009431
Southland is a leading provider of specialized infrastructure construction services. With roots dating back to 1900, Southland and its subsidiaries form one of the largest infrastructure construction companies in North America, with experience throughout the world. The company serves the bridges, tunnelling, communications, data centers, transportation and facilities, marine, steel structures, water and wastewater treatment, and water pipeline end markets. Southland is headquartered in Grapevine, Texas.
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Item 1.01Item 1.01 - Entry into Material Agreement
Item 1.01. Entry Into a Material Definitive Agreement.
As
previously reported, on December 1, 2025, American Bridge Company (“American Bridge”), a wholly-owned subsidiary of Southland
Holdings, Inc. (“Southland”) received an adverse ruling in the case of American Bridge Company v. Clark/Lewis Joint Venture
(“Clark/Lewis”), et al. relating to the Washington State Convention Center project (the “WSCC Project”). In this
litigation, the Superior Court of the State of Washington for King County, by order dated January 15, 2026, ruled in favor of Clark/Lewis
and entered a judgement against American Bridge and certain of its sureties (each, a “Surety,” and collectively, the “Sureties”),
jointly and severally (the “WSCC Judgement”). On March 27, 2026, American Bridge entered into a Settlement Agreement
and Release of Claims (the “WSCC Settlement Agreement”) with the Sureties, among others, to resolve disputes arising out
of the WSCC Project, including the WSCC Judgement. Pursuant to the WSCC Settlement Agreement, the Sureties paid Clark/Lewis a negotiated
settlement amount in connection with the WSCC Judgement. Southland reported a corresponding surety payable, in an amount equal to that
settlement amount, on its unaudited condensed consolidated balance sheet as of June 30, 2026.
On
August 26, 2026, certain subsidiaries of Southland (together with Southland, the “Company”) entered into a Settlement Agreement
(the “Settlement Agreement”) with Liberty Mutual Insurance Company (“Liberty”), Zurich American Insurance Company
and Fidelity and Deposit Company of Maryland (collectively, “Zurich”). Pursuant to the Settlement Agreement, the Company will
pay $5 million to Liberty on or before September 30, 2026, to fully resolve and settle approximately $36.4 million of losses incurred
by Liberty as a Surety in connection with the WSCC Project, of which approximately $34 million relates to the WSCC Judgement.
Based
on its preliminary assessment, the Company expects the Settlement Agreement to favorably impact income (losses) before income taxes by
approximately $29 million in the third quarter of 2026. The Company is continuing to evaluate the appropriate accounting treatment and
related financial statement impact of the Settlement Agreement, and the foregoing estimate is preliminary and subject to change as the
Company completes that evaluation.
The
Company is in negotiations with Zurich to resolve the remaining surety payable related to the WSCC Judgement.
The
foregoing summary of the Settlement Agreement is not complete and is qualified in its entirety by reference to the full text of the Settlement
Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
