I have this same model (Alvarez Yairi DY-38) with laminate flamed maple back and sides. Spotless, though I bought it used. If this had happened to my Yairi (after I finished crying) I would definitely check into the cost of repair. If the cost was reasonable, I would have the repair done. If not, I would replace the injured guitar with another Yairi.
I love my Yairi. I like it so much, I have another one (a used DY-91--a much fancier model that is no longer in production) on the way via Reverb.
With the unfortunate death of K. Yairi, an era has ended among the makers of quality Japanese guitars. Once this loss is fully realized in the marketplace, my (albeit, unqualified) opinion is that the value of used K. Yairi-era guitars will hold firm in the short term, and probably appreciate over the long-run.
Not that market considerations are a compelling reason to buy a guitar.
Greg Rappleye