Southland Holdings Settles WSCC Surety Claims, Agrees $5M Payment

What Happened
Southland Holdings, through certain subsidiaries including American Bridge Company, announced a Settlement Agreement dated August 26, 2026 resolving surety claims tied to the Washington State Convention Center (WSCC) project. Under the agreement the Company will pay Liberty Mutual Insurance Company $5.0 million on or before September 30, 2026 to fully settle approximately $36.4 million of losses Liberty incurred as a surety (about $34.0 million of that relates to the WSCC judgment). Southland previously disclosed an adverse ruling and judgment against American Bridge in the WSCC litigation (adverse ruling Dec 1, 2025; judgment entered Jan 15, 2026) and a prior settlement among American Bridge and certain sureties on March 27, 2026.

Key Details

• Settlement Agreement executed Aug 26, 2026; $5.0 million payment to Liberty due by Sept 30, 2026.
• Liberty’s covered losses: approx. $36.4 million total; ~ $34.0 million attributable to the WSCC judgment.
• Company expects the Settlement Agreement to favorably affect income (losses) before income taxes by about $29 million in Q3 2026 (preliminary).
• Southland is continuing negotiations with Zurich American Insurance Company and Fidelity and Deposit Company of Maryland to resolve remaining surety payable; the full Settlement Agreement is filed as Exhibit 10.1.

Why It Matters
This settlement reduces a significant contingent exposure tied to the WSCC litigation and crystallizes a known cash payment ($5.0M) to Liberty. The company’s preliminary estimate indicates a roughly $29M favorable impact to pre-tax income in Q3 2026, which investors should watch for when Southland finalizes accounting and reports quarterly results. Negotiations with other sureties (Zurich et al.) remain ongoing, so additional financial impacts are still possible.