Invacare 2014 Annual Report Download - page 35

I-31
Square
Feet
Ownership
Or Expiration
Date of Lease Renewal Options Use
European Operations
Pencoed, United Kingdom . . . . . . . . 150,000 December 2019 None Manufacturing and Offices
Porta Westfalica, Germany . . . . . . . . 134,563 November 2021 Two (5yr.) Manufacturing, Warehouse and Offices
Porta Westfalica, Germany . . . . . . . . 8,930 May 2015 One (1 yr.) Warehouse
Porta Westfalica, Germany . . . . . . . . 13,455 Month to Month None Warehouse and Offices
Spanga, Sweden . . . . . . . . . . . . . . . . 16,146 Own — Warehouse and Offices
Thiene, Italy . . . . . . . . . . . . . . . . . . . 21,528 Own — Warehouse and Offices
Trondheim, Norway . . . . . . . . . . . . . 5,027 December 2018 One (6 mos.) Services and Offices
Witterswil, Switzerland. . . . . . . . . . . 40,343 March 2018 One (1 yr.) Manufacturing, Warehouse and Offices
Witterswil, Switzerland. . . . . . . . . . . 2,241 Month to Month None Warehouse
Witterswil, Switzerland. . . . . . . . . . . 2,241 Month to Month None Warehouse
Witterswil, Switzerland. . . . . . . . . . . 4,306 Month to Month One (3 mos.) Warehouse
Item 3. Legal Proceedings.
In the ordinary course of its business, the Company is a defendant in a number of lawsuits, primarily product liability actions
in which various plaintiffs seek damages for injuries allegedly caused by defective products. All of the product liability lawsuits
that the Company faces in the United States have been referred to the Company's captive insurance company and/or excess
insurance carriers while all non-U.S. lawsuits have been referred to the Company's commercial insurance carriers. All such lawsuits
are generally contested vigorously. The coverage territory of the Company's insurance is worldwide with the exception of those
countries with respect to which, at the time the product is sold for use or at the time a claim is made, the U.S. government has
suspended or prohibited diplomatic or trade relations. Management does not believe that the outcome of any of these actions will
have a material adverse effect upon the Company's business or financial condition.
In December 2012, the Company reached agreement with the FDA on the terms of the consent decree of injunction with
respect to the Company's Corporate facility and its Taylor Street wheelchair manufacturing facility in Elyria, Ohio. A complaint
and consent decree were filed in the U.S. District Court for the Northern District of Ohio, and on December 21, 2012, the Court
approved the consent decree and it became effective. The consent decree limited the Company's manufacture and distribution of
power and manual wheelchairs, wheelchair components and wheelchair sub-assemblies at or from its Taylor Street manufacturing
facility. The decree also initially limited design activities related to wheelchairs and power beds that take place at the impacted
Elyria, Ohio facilities. The Company is entitled to continue to produce from the Taylor Street manufacturing facility certain
medically necessary wheelchairs provided that documentation and record-keeping requirements are followed, as well as ongoing
replacement, service and repair of products already in use, under terms delineated in the consent decree. Under the terms of the
consent decree, in order to resume full operations at the impacted facilities, the Company must successfully complete a third-party
expert certification audit at the impacted Elyria facilities, which is comprised of three distinct reports that must be submitted to,
and accepted by, the FDA. After the final certification report is submitted to the FDA, along with the Company’s own report as
to its compliance as well as responses to any observations in the certification report, the FDA will perform an inspection of the
Company's Corporate and Taylor Street facilities to determine whether they are in compliance with the Quality System Regulation
(QSR). The FDA has the authority to inspect at any time. Once satisfied with the Company's compliance, the FDA will provide
written notification that the Company is permitted to resume full operations at the impacted facilities.
During 2013, the Company completed the first two of the third-party expert certification audits, and the FDA found the
results of both to be acceptable. In these reports, the third-party expert certified that the Company's equipment and process validation
procedures and its design control systems are compliant with the FDA's QSR. As a result of the FDA's acceptance of the first
certification report on May 13, 2013, the Taylor Street facility was able to resume supplying parts and components for the further
manufacturing of medical devices at other Company facilities. The Company's receipt of the FDA's acceptance of the second
certification report on July 15, 2013, resulted in the Company being able to resume design activities at the impacted facilities
related to power wheelchairs and power beds. The third, most comprehensive third-party certification audit is a comprehensive
review of the Company's compliance with the FDA's QSR at the impacted Elyria facilities.
With the help of a consulting firm the Company engaged in 2014, the Company's internal subject matter experts are executing
on its action plans to improve the functionality and capabilities of certain quality subsystems, most notably complaint handling