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Litigation
9 Months Ended
Mar. 31, 2017
Litigation [Abstract]  
Litigation

7.  LITIGATION

 

Indiana Civil Litigation – In December 2013, the Company entered into a confidential agreement to settle the Indiana Civil Litigation. During the quarters ended March 31, 2017 and 2016, the Company received $1.2 million and $2.0 million, respectively, and during the nine months ended received $1.2 million and $2.3 million, respectively, for recovery of litigation settlement costs from insurers. This amount is recorded as “Litigation settlement reimbursements” in the Consolidated Statements of Income.



During the quarter ended March 31, 2017, the Company recorded $0.1 million of legal expenses incurred pursuing insurance coverage which was offset by reimbursements of $1.2 million from insurers. During the quarter ended March 31, 2016, the Company recorded $0.2 million of legal expenses incurred pursuing insurance coverage which was offset by reimbursements of $0.8 million from insurers.  During the nine months ended March 31, 2017, the Company recorded $0.3 million of legal expenses which was offset by reimbursements of $1.2 million from insurers. During the nine months ended March 31, 2016, the Company recorded $0.4 million of legal expenses which was offset by reimbursements of $0.8 million from insurers. These expenses are included in “selling, general and administrative” (SG&A) expense in the Consolidated Statements of Income.



The recovery of litigation settlement and defense costs from insurance carriers is now complete and the Indiana litigation against insurance carriers has been closed.



In March 2016, the Company received a General Notice Letter for the Lane Street Groundwater Superfund Site located in Elkhart, Indiana from the United States Environmental Protection Agency (EPA). The EPA has determined that the Company may be responsible under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The Company continues to believe that it did not cause or contribute to the contamination. In April 2016, the EPA issued their proposed clean-up plan for groundwater pollution and request for public comment. The Company responded to the request for public comment in May 2016. The EPA issued a Record of Decision in August 2016 and estimated total costs to remediate of $3.6 million. As of March 31, 2017, the EPA has not issued a special notice letter to Flexsteel which would indicate the EPA’s intent to pursue Flexsteel for contribution to the remediation cost. The Company has not recorded a liability in the Consolidated Balance Sheets because it is not possible to reasonably estimate the amount, if any, of the estimated remediation cost as responsible parties have not been named by the EPA.



Other Proceedings – From time to time, the Company is subject to various other legal proceedings, including lawsuits, which arise out of, and are incidental to, the conduct of the Company’s business. The Company does not consider any of such other proceedings that are currently pending, individually or in the aggregate, to be material to its business or likely to result in a material effect on its consolidated operating results, financial condition, or cash flows.