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Forward Foods Declares Bankruptcy Over Salmonella Outbreak

Feb 18, 2009 | Parker Waichman LLP
Forward Foods Declares Bankruptcy

Food Manufacturer Was Forced To File Bankruptcy

The Peanut Corporation of America (PCA) can add another victim to its growing list of casualties.  This time, a food manufacturer was forced to file chapter 11 bankruptcy over the massive recall and outbreak of tainted peanut products produced by PCA, reported Newsday.

Forward Foods, which also operates under the name Detour, maker of high protein snacks and meal replacement bars, filed for bankruptcy protection citing that a “significant” portion of its stock had to be deemed condemned over fears of salmonella poisoning, said Newsday.  Detour products containing peanut products from PCA accounted for the overwhelming majority of Forward Foods’ protein bar sales, it said in bankruptcy documents, added Newsday.

Meanwhile, the U.S. Centers for Disease Control and Prevention (CDC) said that, to date, 642 people in 44 states have fallen ill, which is an increase of 20 in less than one week, said Newsday.  Over half of those sickened were children and nine people have died.  Also, nearly 2,250 products in 17 categories have been recalled by over 200 companies.  Since most salmonella cases are never reported to health authorities, it is likely that PCA products have sickened even more than the overwhelming 642 known victims.  Newsday also noted that food banks across the country have also had to dispose of thousands of pounds of food.

PCA At The Center of Criminal Probe

PCA is at the center of a criminal probe; faces more than a dozen lawsuits involving victims who were sickened by the company's salmonella products, or their families—eight having been filed last week; bankruptcy filings, FBI search warrants; and the possibility of criminal charges, being called for by Congress.  PCA filed Chapter 7 bankruptcy on February 7, which means PCA will liquidate its assets to repay creditors, said Newsday.  Authorities closed PCA’s Texas plant last week and the Virginia plant—the only plant not linked to salmonella—also closed last week, said Newsday.

Last month, inspections of the Georgia plant found that PCA shipped peanuts that tested positive for salmonella contamination at least a dozen times in 2007 and 2008.  At the time of that discovery, PCA officials told the FDA that those peanuts tested negative for the bacteria in a second round of testing; however, the FDA learned PCA actually shipped some peanuts before the second tests were completed.  Other lots were shipped without testing and, in some cases, no second test was performed, even after the first came back positive.  Those same inspections of the Blakely plant turned up mold, roaches, and a leaking roof.

The Texas Department of Health recalled everything made in Plainview after it found horrifically revolting conditions including dead rodents, rodent excrement, and bird feathers in a crawl space above a production area.  According to the Associated Press (AP), the plant’s air handling system was pulling debris from the infested crawl space into production areas.   Despite having been in operation since 2005, that facility was unlicensed, and had never been inspected before the salmonella outbreak.

The Virginia facility, although not tied to the outbreak, was found to have flaking paint and evidence of rodents in 2007 and 2008.  The problems were classified as minor, and PCA promised to fix them, reported the AP in an earlier article.  When inspectors returned a second time in 2008 to ensure this was done, they found two dead mice in traps in a warehouse, as well as an open door, and a 32-inch-wide gap in strip curtains “completely exposed to the entrance of pests,” said the AP.  Mold was also found on the outside of 43 totes of blanched peanuts.

Need Legal Help Regarding Salmonella Outbreak?

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