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Product Liability, Litigation and Other Contingencies
12 Months Ended
Dec. 28, 2013
Product Liability, Litigation and Other Contingencies

7. Product Liability, Litigation and Other Contingencies

Product Liability

Our Company is subject to various product liability claims and/or suits brought against us for claims involving damages for personal injuries or deaths. Allegedly, these injuries or deaths relate to the use by claimants of products manufactured by our Company and, in certain cases, products manufactured by others. The ultimate outcome of these claims, or potential future claims, cannot be determined. Our management obtains an actuarial analysis and has established an accrual for probable losses based on this analysis, which considers, among other factors, our previous claims history and available information on alleged claims. However, due to the uncertainty involved with estimates, actual results could vary substantially from those estimates.

In the opinion of management, amounts accrued for exposures relating to product liability claims and other legal proceedings are adequate and, accordingly, the ultimate resolution of these matters is not expected to have a material adverse effect on our Company’s consolidated financial statements. As of December 28, 2013, our Company had no known probable but inestimable exposures relating to product liability or other legal proceedings that are expected to have a material adverse effect on our Company.

There can be no assurance, however, that unanticipated events will not require our Company to increase the amount it has accrued for any matter or accrue for a matter that has not been previously accrued because it was not considered probable.

Certain of our entities are named in lawsuits by groups of former collegiate players (1 lawsuit) and retired NFL players (74 lawsuits consolidated into one multidistrict litigation). These cases are at preliminary stages and we are unable to predict outcomes or reasonably estimate a range of possible losses, if any. While the claims are complex and the alleged injury occurrences span many years, we believe these complaints are without merit and are vigorously defending against them.  Further, during the time period of the factual allegations, the entity had product liability insurance from numerous carriers. Through insurance coverage counsel, we have been able to identify policies, put carriers on notice and pursue coverage claims. We anticipate that the insurance policies that were in place during the time periods covered by the allegations will afford considerable coverage for defense costs during the course of the litigation. In the event that we are determined to have liability in these matters, there can be no assurance that our insurance coverage will adequately cover such liability.

Our Company maintains product liability insurance coverage under various policies. These policies provide coverage against claims resulting from alleged injuries sustained during the respective policy periods, subject to policy terms and conditions. The primary portion and three additional excess layers of our Company’s product liability coverage are written under policies expiring in January 2015.

Litigation and Other Contingencies

Our Company is also involved in various non-product liability claims and actions, including employment related matters as well as claims relating to potential infringement of intellectual property rights of others. We do not believe that any resulting damage awards will have a material adverse effect on our financial results. In 2002, one of our competitors sued us in Canadian Federal Court alleging infringement of a hockey skate patent. The details of such lawsuit have been previously disclosed in prior Company filings. In June 2013, we settled the lawsuit.