Track down every lawsuit a 10-K discloses, and what it might cost
Item 3 of a 10-K lists material pending legal proceedings, but it often says little and points to a note in the financial statements where the real detail sits: the parties, the claims, the status and whether the company has set money aside. Ask Search+ "What material lawsuits or investigations does this filing disclose, and what is the status of each?" and the cited answer brings Item 3 and the contingencies note together so you can read both.
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Last updated October 2026
How to review legal proceedings with Search+
- Upload the 10-K and the latest 10-Q
Cases move between filings. Adding the most recent quarterly report PDF next to the annual one lets you ask whether a matter settled, advanced or was dismissed since year end.
- Ask about each matter by name
Once an answer lists the disclosed cases, ask about one at a time: who the parties are, what is claimed, which court or agency is involved and where it stands. Separate questions give each case its own citations.
- Read the accounting note, not just Item 3
Ask what the commitments and contingencies note says about accruals or a range of possible loss. Opening that citation shows whether the company has recorded a liability or says it cannot estimate one.
Questions to ask about disclosed litigation
Which legal proceedings and government investigations does this 10-K describe, across Item 3 and the notes?
For the largest case, what damages or relief does the plaintiff seek, and has the company recorded an accrual?
Does the filing mention any inquiry, subpoena or investigation by a government agency?
Which matters have settled, been dismissed or gone to appeal during the year?
Does the company say any of these claims are covered by insurance or indemnified by another party?
Which legal matters are new in this year's filing, and which disappeared since the previous 10-K?
What to look for in a legal proceedings disclosure
Many companies write a short Item 3 that refers readers to the commitments and contingencies note in the financial statements. Ask about both, or you may only see the summary.
The item covers material pending proceedings, including those a government authority is known to be contemplating. Ordinary routine litigation incidental to the business is generally left out.
A full description names the court or agency, the date the case began, the principal parties, the basis of the claim and the relief sought. Missing pieces are worth a follow-up question.
Under US accounting rules a company generally records a liability when a loss is probable and can be reasonably estimated, and discloses matters where a loss is reasonably possible. The note tells you which applies.
Risk factors may describe the threat of future claims, and the MD&A may discuss legal costs or settlements. Asking about a case by name can surface all three.
Each answer carries inline citations, and opening one shows the excerpt behind it. Citations include a page or section reference when the filing provides one.
Litigation wording and what to ask next
| Wording you may see | What it usually signals | A follow-up question |
|---|---|---|
| "See Note [X], Commitments and Contingencies" | Item 3 defers to the financial statement note | What does that note say about each matter? |
| "we intend to vigorously defend" | The company disputes the claim | What relief does the plaintiff seek? |
| "probable and reasonably estimable" | A liability has been, or should be, accrued | How much has the company accrued for this matter? |
| "reasonably possible" | A loss could happen but is not accrued | Does the filing give a range of possible loss? |
| "unable to estimate" | No amount is given for the exposure | What reasons does the company give for not estimating? |
| "putative class action" | A lawsuit seeking class status | Has a class been certified, and what period does it cover? |
| "civil investigative demand" or "subpoena" | A government inquiry is under way | Which agency issued it and what does it concern? |
What is the legal proceedings item in a 10-K?
Legal proceedings is Item 3 of the 10-K, where a company describes material pending lawsuits, arbitrations and government proceedings it or its subsidiaries are party to, or that involve its property, other than routine litigation incidental to the business.
Questions about legal proceedings in a 10-K
Why is Item 3 in my 10-K only one sentence long?
Can Search+ tell me how much a lawsuit might cost the company?
How do I see whether a case was resolved after year end?
Will it find a government investigation mentioned only in passing?
Is a summary of the lawsuits legal advice?
How do I know a case name or court in the answer is right?
Know which lawsuits the company is carrying
Start a workspace, upload the 10-K, and ask which legal matters it discloses and where each stands.
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