Business Interruption and Insurance Recovery
As discussed in Note 18 "Special Charges, Net", a severe rainy season impacted many parts of Colombia in December 2010 and caused the Company to temporarily cease manufacturing at its facility in Cali, Colombia due to a breach of a levy and flooding at the industrial park where the facility is located. The Company established temporary offices away from the flooded area and worked with customers to meet their critical needs through the use of its global manufacturing base. The facility re-established manufacturing operations on April 4, 2011 and operations at this facility reached full run rates in the third quarter of 2011.
The Company maintains property and business interruption insurance policies. On March 4, 2011, the Company filed a $6.0 million claim under one of its insurance policies to cover both the property damage and the business interruption (the “Primary Policy”). The Primary Policy had a $1.0 million deductible. In fiscal 2011, the Company collected $5.0 million as settlement of its claim under the Primary Policy and $0.7 million as settlement of claims under other insurance policies.
Included in the Predecessor's Operating income (loss) for the one month ended January 28, 2011 is $1.0 million of insurance proceeds related to recovery of certain losses recognized for property damage and business interruption experienced by the Company during that period. Of the $1.0 million for the one month ended January 28, 2011, $0.3 million and $0.7 million were recorded in Selling, general and administrative expenses and Cost of goods sold, respectively, in order to offset the recognized losses included in the Primary Policy.
