Quarterly report pursuant to Section 13 or 15(d)

Note 13 - Commitments and Contingencies

v3.19.1
Note 13 - Commitments and Contingencies
3 Months Ended
Jan. 31, 2019
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
Note
13.
Commitments and Contingencies
 
Successor
 
Self-insurance
 
The Company’s automobile, general and workmen’s compensation insurance is partially self-insured. The general liability deductible was
$100,000
per claim as of
January 31, 2019
and
October 31, 2018.
The workmen’s compensation and automobile policies are fully-insured. The Successor and Predecessor had accrued
$4.9
million and
$3.2
million, as of
January 31, 2019
and
October 31, 2018,
respectively, for claims incurred but
not
reported and estimated losses reported, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.
 
The Company offers employee health benefits via a partially self-insured medical benefit plan. Participant claims exceeding certain limits are covered by a stop-loss insurance policy. The Company contracts with a
third
party administrator to process claims, remit benefits, etc. The
third
party administrator requires the Company to maintain a bank account to facilitate the administration of claims. The account balance was
$0.3
million and
$0.3
million, as of
January 31, 2019
and
October 31, 2018,
respectively, and is included in cash and cash equivalents in the accompanying consolidated balance sheets.
 
Management has accrued
$1.5
million and
$1.0
million, as of
January 31, 2019
and
October 31, 2018,
respectively, for health claims incurred but
not
reported based on historical claims amounts and average lag time, which is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets.
 
Litigation
 
The Company is currently involved in certain legal proceedings and other disputes with
third
parties that have arisen in the ordinary course of business. Management believes that the outcomes of these matters will
not
have a material impact on the Company’s financial statements and does
not
believe that any amounts need to be recorded for contingent liabilities in the Company’s consolidated balance sheets.
 
Letters of credi
t
 
The ABL Credit Agreement provides for up to
$7.5
million of standby letters of credit. As of
January 31, 2019,
total outstanding letters of credit totaled
$1.3
million, the vast majority of which had been committed to the Company’s general liability insurance provider.