Hundreds of fruit containers from overseas shipped to a shipping yard in Louisiana were lost during Hurricane Katrina resulting in millions of dollars lost.  A computerized perpetual tracking system kept track of each in real time. This allowed us to identify each container at the yard just prior to the hurricane.  All containers that were found after the hurricane were relieved from the list and the remaining containers were considered lost.

Values for the containers were calculated based upon purchase invoices for their replacement because we could identify each container we applied the appropriate depreciation allowance.

Our efforts provided our client with detailed loss values for a well supported and amicable compensation settlement.

A Hawaiian resort lost use of their air conditioner for two months and issued a claim for more than $350,000.  The claim consisted of lost revenue from room rentals and banquet functions.

A majority of the claim was based on bookings that were cancelled during the loss period for approximately $210,000.  We compared preloss cancellations to cancellations during the outage period and found no increase during the air conditioner outage.  The claimed cancellations were actually at their normal level.  Therefore, we calculated no lost revenue for room cancellations.

Lost revenue of $70,000 was also claimed due to unexpected departures.  These guests were staying at the hotel, but abruptly left because of the inconvenience from the loss of air conditioning.  The claim included the total stay of the booking.  For example, if a guest booked for four days, and left after three days, the claim included the full four-day booking.   Our analysis was only for the remaining one day left in the stay.  As a result we calculated lost room revenue of only $10,000 due to unexpected departures, a difference of $60,000.

The last portion of the claim, for banquet cancellations of $70,000, was well documented.  We found no exceptions and were in agreement with the claimed amount.

Our calculations of lost revenue for all segments in the claim totaled $80,000.  An additional $15,000 was saved in costs of food and labor, resulting in a settlement of $65,000. This was a difference of $285,000 from the claimed amount.

Industry Experience

Contact Info

1800 Robertson Blvd, #1600
Los Angeles, CA 90035
info@gladsteincpa.com
Telephone (323) 634-0500
Facsimile (323) 634-0544