U.S. Magistrate Judge Michael Urbanski Virgnia has recommended to pay $12m in injury claims related to a Salmonella outbreak in Peanut products. The settlement must now be approved by a bankruptcy court judge, as the Peanut Corporation of America filed for Chapter 7 bankruptcy in February 2009, after salmonella was linked to peanut products from the company.
The outbreak was discovered after an open container of peanut butter at a long-term care facility in Minnesota was found to contain a strain of salmonella in January 2009. The salmonella outbreak originated at the Peanut Corporation of America’s Georgia and Texas plants and was linked to more than 700 illnesses and nine deaths across the country. The outbreak also led to the recall of more than 3,900 peanut-containing products from more than 200 companies – one of the largest product recalls in US history. The peanut butter was traced to two plants owned by Lynchburg-based Peanut Corp. of America in Blakely, Ga., and Plainview, Texas. The products from the plants were eventually linked to the nine deaths and illnesses of about 700 people.
Under the brand names Parnell’s Pride and King Nut, Peanut Corp. produced not only peanut butter, but peanut paste, an ingredient found in foods from granola bars and dog biscuits to ice cream and cake. More than 3,490 products were recalled.
The company’s insurer, Hartford Casualty Insurance Co., will be paying the compensation based on the extent of victims’ illnesses. The 122 settlements range from $2 million for a West Virginia man, and nearly $1 million in the estate of an Alabama woman, to less than $50,000 for some of the children. In addition, the Kellogg Company has agreed to pay $1.5m to the families of children who fell ill and $580,000 between the families of two people who died as a result of the outbreak.
“All of these families have mounting medical bills, and this happened right at the heat of the economy tanking,” said Houston attorney Ron Simon, who represented some of the victims. “This is going to give them a chance to pay those bills and move on and get closure on what was a very, very traumatic part of their lives.”
The judge’s recommendation follows a hearing last week where the judge questioned three lawyers representing the families and children, trustees in the bankruptcy case and a lawyer for Kellogg.