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Topps Meat Company, Maker of E. Coli Tainted Beef that Sickened Dozens, to be Purchased by Premio Foods
Dec 28, 2007 | Parker Waichman Alonso LLP
The Topps Meat Company, the bankrupt ground beef processor that recalled millions of pounds of E. coli tainted meat in September, might soon have a new owner. Premio Foods, of Hawthorne, N.J., is seeking to purchase Topps Meat via a federal bankruptcy proceeding in a deal that could close in early January. The 67-year-old Topps Meat Company was forced to seek Chapter 7 Bankruptcy Protection following an E. coli outbreak that sickened 100 people in the US and Canada that was blamed on the company’s frozen ground beef products.Topps Meat Company, a leading US frozen ground beef processor, recalled over 330,000 pounds of frozen ground beef patties in late September following an E. coli outbreak in New York that sickened six people and was linked to one of its products. While investigating the Topps ground beef E. coli outbreak, health authorities discovered a box of Topps frozen ground beef patties in one of the victim’s freezers. Testing revealed the patties were infested with E. coli O157:H7. Days later, Topps recalled another 21 million pounds of beef. Before it was over, the Topps Ground Beef E. coli outbreak spread to 8 states and several Canadian provinces. Unable to absorb the costs of the Topps ground beef E. coli recall, the company closed its doors on October 5, and filed for bankruptcy in November. Its Elizabeth, New Jersey processing plant has been idle ever since.
The Topps case was one of the largest and most serious meat recalls this year involving E. coli beef contamination; federal and state health officials found at least three types of the O157:H7 strain in the plant. Following the first recall, the US Department of Agriculture (USDA) inspected Topps’ Elizabeth, New Jersey plant. Beef grinding operations were suspended after inspectors discovered inadequate bacterial contamination prevention controls. USDA staffers also found Topps had lax standards for testing of meat acquired from foreign suppliers and that Topps regularly mixed meat that had been tested for bacterial contamination and untested meats. Further investigation determined that the contamination source was likely Rancher’s Beef Ltd., a Topps supplier based in Alberta, Canada.
Currently, Topps Meat Company is owned by the Buffalo-based private equity firm Strategic Investments & Holdings, Documents filed with a federal bankruptcy court in New Jersey indicate Premio has offered $794,605 for the Topps trademarks, as well as its physical assets. The deal would include equipment and property of the Elizabeth, N.J.-based Topps, and more than 1.8 million pounds of potentially E. coli-contaminated meat. The proposed asset purchase agreement filed with the court indicates Premio will pay 10 cents per pound for some 1.3 million of packaged inventory, and five cents per pound for nearly 536,000 pounds of raw meat. Under federal law, Premio will be required to destroy all the leftover product that is still sitting in Topps warehouses.
Ecoli Infection
