As the Associated Press reported, Chi-Chi’s faces 5 lawsuits over hepatitis, and more lawsuits are likely to follow. The outbreak has killed three people and sickened more than 600. The challenge we face in getting these victims compensated is partially that the company filed for Chapter 11 bankruptcy, so all claims against the company are automatically stayed, meaning all lawsuits have to be approved by the bankruptcy court in order to proceed. The other problem is insurance.
The company has $51 million dollars worth of liability insurance, which likely won’t cover the costs of compensating this many victims, especially considering the outbreak has caused deaths and liver transplants.
As the Associated Press reports:
Hundreds of people sued the Jack in the Box fast-food chain after it served hamburger tainted with E. coli in 1993 that killed three children and sickened hundreds.
The burger chain offered to pay medical bills and some lost wages. Still, the linchpin to settling the lawsuits was $100 million in liability insurance, said William Marler, a Seattle attorney who has filed three of the five Chi-Chi’s lawsuits so far.
Chi-Chi’s has stated in bankruptcy documents that it has $51 million in liability insurance – about half as much as Marler believes the company will need.
Marler represents some 80 people who contracted hepatitis A or received shots to prevent it after eating at the restaurant, about 25 miles northwest of Pittsburgh. The three suits Marler has filed have been put on hold by a judge to protect creditors of the Louisville, Ky.-based chain.