Finsbury Food, whose Memory Lane cakes business was caught up in this month's toxic eggs scare, is in dispute with said insurer over its claim for product withdrawal costs.
Finsbury saw retailers pull its products from shelves amid concerns they contained liquid eggs imported from Germany and were potentially contaminated with dioxin.
The Food Standards Agency said at the time there was no safety risk from eating the products and Finsbury said its insurer had challenged its claim for costs. It said the scare led to a "challenging" start to its second half-year, while it also battles rising input costs and cautious consumer spending.
However, its revenues in the first six months rose 6 per cent thanks to a 14.5 per cent surge in sales across its bread and "free from" division.