KANP Kaanapali Land LLC (PK)

ITEM 1.01. Entry into a Material Definitive Agreement.

On April 16, 2021, the U.S. Department of Justice and the U.S. Environmental Protection Agency, on behalf of various federal agencies of the United States of America, executed a Consent Decree with Kaanapali Land, LLC, a Delaware limited liability company (the “Company”) that, if entered by the U.S. District Court sitting in the District of Hawaii, United States of America v. Kaanapali Land, and Oahu Sugar Company, LLC Case No. 1:21-CV-00190, would resolve the U.S. federal government’s current environmental claims against the Company with respect to contamination at the former mixing site on Waipio Peninsula on Oahu in Hawaii that had been leased by Oahu Sugar Company LLC, a former subsidiary of the Company. In return for payments by the Company totaling $7.5 million, the Consent Decree would resolve liability asserted by the U.S. government against the Company under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) as well as under the Clean Water Act, both for response costs (those costs expended for investigation and cleanup) and for natural resource damages.

The Company has been in discussions with Fireman’s Fund, the insurance carrier with which the Company and certain of its subsidiaries maintained liability policies, regarding the payment or reimbursement by Fireman’s Fund of a significant portion of the settlement amount to be paid by the Company under the Consent Decree. The Company can give no assurances as to what portion, if any, of the settlement payment will be recovered from Firemen’s Fund.

The Consent Decree is subject to a number of contingencies that could prevent it from being finalized with its current terms. In particular, and without limitation, (i) the Consent Decree has been lodged with the District Court for a period of at least 30 days for public notice and comment, and the United States has reserved the right to withdraw or withhold its consent if the comments regarding the Consent Decree disclose facts or considerations that indicate the Consent Decree is inappropriate, improper or inadequate, (ii) the Company may oppose entry of the Consent Decree as the result of any objection in other pending proceedings to use by the Company of site-related insurance proceeds from Fireman’s Fund; and (iii) the District Court in Hawaii might determine not to enter the Consent Decree as currently written or as approved by the federal government. There can be no assurance that the contingencies will not preclude entry of the Consent Decree.

The foregoing description of the Consent Decree and the matters contemplated thereby in this Current Report on Form 8-K is only a summary and is qualified in its entirety by reference to the complete Consent Decree, a copy of which is filed as Exhibit 10.1 and incorporated by reference herein.