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Commitments and Contingencies
9 Months Ended
Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
 
Legal Proceedings

From time to time, the Company is a defendant or plaintiff in various legal proceedings which arise in the normal course of business. As such the Company is required to assess the likelihood of any adverse outcomes to these proceedings as well as potential ranges of probable losses. A determination of the amount of the provision required for commitments and contingencies, if any, which would be charged to earnings, is made after careful analysis of each proceeding. The provision may change in the future due to new developments or changes in circumstances. Changes in the provision could increase or decrease the Company’s earnings in the period the changes are made. It is the opinion of management, after consultation with legal counsel, that the ultimate resolution of these proceedings will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Several lawsuits have been filed by purported stockholders of Hill relating to the Merger: on September 15, 2022, a lawsuit captioned Shiva Stein v. Hill International, Inc. et al, Case No. 1:22-cv-07907, was filed the United States District Court for the Southern District of New York (the “Stein Complaint”); on October 19, 2022, an additional lawsuit captioned Brian Dixon v. Hill International, Inc. et al., Case No. 1:22-cv-01374, was filed in the United States District Court for the District of Delaware; and on October 21, 2022 (the “Dixon Complaint” and together with the Stein Complaint and Dixon Complaint, the “Complaints”), another lawsuit captioned Sean Riley v. Hill International, Inc. et al., Case No. 1:22-cv-08983, was filed in the United States District Court for the Southern District of New York (the “Riley Complaint”). The Stein Complaint generally alleges that Hill made misleading or materially incomplete disclosures regarding the Merger in the preliminary proxy statement on Schedule 14A filed with the U.S. Securities and Exchange Commission (“SEC”) on September 14, 2022, including but not limited to claims that the preliminary proxy statement omitted material information regarding the financial projections provided to Houlihan Lokey and the valuation analyses performed by Houlihan Lokey, and that, as a result, Hill and each member of Hill’s board of directors violated Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and each member of Hill’s board of directors violated Section 20(a) of the Exchange Act. The Stein Complaint also alleges that all defendants violated 17 C.F.R. § 244.100. The Dixon Complaint and Riley Complaint allege similar disclosure deficiencies with respect to Hill’s definitive proxy statement on Schedule 14A filed with the SEC on September 30, 2022 (the “Definitive Proxy Statement”). The Complaints generally seek (i) injunctive relief, (ii) rescission in the event the merger is consummated or alternatively rescissory damages, (iii) an accounting for all damages suffered, (iv) plaintiff’s costs and disbursements in connection with the actions, including plaintiff’s attorneys’ and experts’ fees, and (v) such other relief as the court deems just and proper. Additionally, Hill has received demand letters from purported stockholders of the Company that contain claims similar to those in the Complaints.

Hill and its board of directors believe that the claims asserted in the Complaints and demand letters are without merit. However, solely to moot the unmeritorious disclosure claims and minimize the risk, costs, burden, nuisance and uncertainties inherent in litigation, Hill supplemented the disclosures contained in the Definitive Proxy Statement on October 24, 2022 (the “Supplemental Disclosures”) which should be read in conjunction with the Definitive Proxy Statement. Nothing in the Supplemental Disclosures will be deemed an admission of the legal necessity or materiality under any applicable laws for any of the disclosures set forth therein.

The outcome of any current or future litigation related to the Merger, is uncertain. Such litigation, if not resolved, could prevent or delay consummation of the Merger and result in substantial costs to Hill, including any costs associated with the indemnification of directors and officers. One of the conditions to the consummation of the Merger is that no governmental entity of competent jurisdiction (i) enacted, issued or promulgated any order that is in effect or (ii) issued or granted any order or injunction (whether temporary, preliminary or permanent) that is in effect, in each case which has the effect of preventing, making illegal or otherwise prohibiting the consummation of the merger. Therefore, if a plaintiff were successful in obtaining an injunction prohibiting the consummation of the Merger, then such injunction may prevent the Merger from being consummated, or from being consummated within the expected time frame.
 
Loss on Performance Bond

On February 8, 2018, the Company received notice from the First Abu Dhabi Bank ("FAB", formerly known as the National Bank of Abu Dhabi) that Public Authority of Housing Welfare of Kuwait submitted a claim for payment on a Performance Guarantee issued by the Company for approximately $7,938 for a project located in Kuwait. FAB subsequently issued, on behalf of the Company, a payment on February 15, 2018. The Company is taking legal action to recover the full Performance Guarantee amount. On September 20, 2018 the Kuwait First Instance Court dismissed the Company's case. As a result, the Company fully reserved the performance guarantee payment above in the first quarter of 2018. The Company filed an appeal before the Kuwait Court of Appeals seeking referral of the matter to a panel of experts for determination. On April 21, 2019, the Court of Appeals ruled to refer the matter to the Kuwait Experts Department. Hearings with the Kuwait Experts Department were held during July and September 2019. A final report was issued by the panel of experts in October 2019 for the held hearings on January 7, 2020 and February 4, 2020 and reserved the case for judgment to be issued. In June 2020, the Kuwait Court of Appeal issued judgement confirming the Kuwait First Instance Court's decision. The Company filed a pleading before the Kuwait Cassation Court in August 2020. Hill's challenges are still pending before the Kuwait Cassation Court and a hearing has not yet been scheduled.
Other
 
The Company has identified a potential tax liability related to certain foreign subsidiaries’ failure to comply with laws and regulations of the jurisdictions, outside of their home country, in which their employees provided services. The Company has estimated the potential liability to be approximately $173, which is included in other liabilities in the consolidated balance sheet at September 30, 2022.