Company: PAGP
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001581990-25-000006
Chunk: 266

Company: PLAINS GP HOLDINGS LP
Filing Date: 2025-02-28
Form: 10-K
Item: Item 8
Chunk 266
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 Barbara County by (x) companies and individuals who provided labor, goods, or services associated with oil production activities they claim were disrupted following the Line 901 incident and (y) a landowner on an adjacent pipeline alleging property damage from the “stigma” of the Line 901 incident. We are vigorously defending these remaining lawsuits, which have not yet been set for trial, and believe we have strong defenses. The ultimate outcome of such matters is uncertain, and an unfavorable resolution could have a material impact on our results of operations.

F-52

Table of ContentsIndex to Financial StatementsPLAINS GP HOLDINGS, L.P. AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

In November 2022, we submitted claims to several of our insurance carriers seeking reimbursement for a $230 million payment made in October of 2022 to settle a class action lawsuit stemming from the Line 901 incident (the “Class Action Settlement”). We had previously received payment of approximately $3.6 million from one insurer, which represented the final payment obligation of such insurer and brought the total amount collected from all insurers under such program to $275 million of the $500 million policy limits. In response to denials of coverage or other failures to timely tender payment, we initiated final and binding insurance arbitration proceedings against the insurers responsible for the remaining $225 million of coverage. Such insurers generally alleged that some or all damages encompassed by the Class Action Settlement were not covered by their policies and that all or some portion of the $275 million for which we had already received insurance reimbursement did not, for purposes of determining whether their policies were triggered, properly exhaust the underlying policies that paid those sums. As of December 31, 2023, we believed that our claim for reimbursement was probable of recovery despite the ongoing arbitration proceedings. Our belief at that time was based on: (i) our analysis of the terms of the underlying insurance policies as applied to the facts and circumstances that comprised our claim for reimbursement, (ii) our experience with the cost submissions and timely collection of claims for the $275 million previously collected for this incident under the same insurance program as the denied claims, including from some of the same insurers who were then denying claims, (iii) our extensive legal review and assessment of the insurer’s claimed basis for denial of coverage, which review and assessment included the advice of external legal counsel experienced in these type of matters that supported our belief that our insurers were required to provide coverage based