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Commitments and Contingencies
12 Months Ended
Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies [Text Block]

20. Commitments and Contingencies

Legal Proceedings

Various current and potential claims and litigation arising in the ordinary course of business are pending against the Company. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable that may be incurred in connection with any such currently pending matter. In the Company's opinion, the eventual resolution of such matters, either individually or in the aggregate, is not expected to have a material impact on the Company's financial position, results of operations, or cash flows. However, litigation is inherently unpredictable and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on the Company's financial position, results of operations, and cash flows for the reporting period in which any such resolution or disposition occurs.

Arbitration Proceedings

On January 31, 2022, Acomo submitted a Request for Summary Arbitral Proceedings to the Netherlands Arbitration Institute, which was later amended on February 16, 2022, asserting alleged claims against the Company and its subsidiaries, Coöperatie SunOpta U.A. and SunOpta Holdings LLC, relating to a dispute regarding the allocation of the purchase price Acomo paid to acquire the shares of The Organic Corporation B.V. and the membership interests of Tradin Organics USA LLC in connection with the closing of the transactions contemplated by the Master Purchase Agreement entered into by Acomo, the Company and the aforementioned subsidiaries on November 25, 2020 (the "Transaction"). On May 25, 2022, the parties entered into a definitive Settlement Agreement to resolve all outstanding matters related to the Master Purchase Agreement, which included a cash payment of $5.9 million from the Company to Acomo to settle certain post-closing adjustments related to the Transaction, following which the Request for Summary Arbitral Proceedings was withdrawn.
 

Environmental Laws

The Company believes that, with respect to both its operations and real property, it is in material compliance with current environmental laws. Based on known existing conditions and the Company's experience in complying with emerging environmental issues, the Company is of the view that future costs relating to environmental compliance will not have a material adverse effect on its consolidated financial position, but there can be no assurance that unforeseen changes in the laws or enforcement policies of relevant governmental bodies, the discovery of changed conditions on the Company's real property or in its operations, or changes in the use of such properties and any related site restoration requirements, will not result in the incurrence of significant costs.

Finance Lease Commitments

As at December 31, 2022, the Company had entered into finance lease agreements to provide for up to $55 million of financing related to the build-out of the Company's Midlothian, Texas, plant-based beverage facility. As the Company controls the right-of-use assets during the build-out construction, it recognizes costs incurred related to the build-out as construction in process in property, plant and equipment, with a finance lease liability recognized in long-term debt for the amount funded to date by the lessor, which amounted to $51.4 million as at December 31, 2022.

 

In addition, as at December 31, 2022, the Company had additional commitments under various finance leases that provide for up to approximately $35 million of financing for various expansion projects underway within the Company's plant-based and fruit snacks operations, which are expected to become operational during 2023. As these finance leases had not commenced as at December 31, 2022, no amount of underlying right-of-use assets, or lease liabilities, were recognized on the consolidated balance sheet as of that date.
 

Commitments for Plant Acquisition

As at December 31, 2022, the Company had incurred approximately $55 million related to the purchase and installation of manufacturing equipment for its Midlothian, Texas, facility, and had remaining contractual commitments of approximately $10 million, which is expected to be incurred during 2023. These purchases are being principally financed through borrowings under the Term Loan Facility of the Company's Asset-Based Credit Facilities.

Letters of Credit

As at December 31, 2022, the Company had outstanding letters of credit totaling $5.4 million.