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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation


Some good news for those sickened by Chi Chi’s hepatitis A outbreak: attorneys for the company have asked the bankruptcy court for permission to pay up to $20,000 to each victim for medical expenses, lost wages and related costs.

“We received approval from the U.S Bankruptcy Court to proceed with a plan to begin to respond to the needs of the affected customers,” said Bill Zavertnik, the company’s chief operating officer. “We established a toll-free number to enable all our customers and employees affected by the outbreak who are having questions or concerns about hepatitis A to contact us.”

“It was an important first step,” said local attorney Jerry Meyers, who with a Seattle-based law firm represents about 60 people who became ill in the outbreak. “The real challenge will be to see to it that the people who have suffered serious injuries are fairly and appropriately compensated.”

Although my firm filed lawsuits against Chi Chi’s before the company filed for Chapter 11 bankruptcy on October 8, all claims on the company are automatically stayed. Chi Chi’s request of the bankruptcy court to allow the company to spend up to $500,000 to reimburse outbreak victims is the first step in accessing the company’s $51 million in liability insurance to compensate victims.

“We didn’t have a problem with a claims process being started and a claims-handling agency being engaged by [the company],” Marler said. “But we felt strongly that people shouldn’t sign away their rights.”

Affected people will not have to waive their rights to pursue future claims against the company to get reimbursed for their out-of-pocket expenses, he added.

I, along with local counsel, will soon be asking the bankruptcy court to lift the stay so we can file lawsuits for our clients, at least one of whom has a medical bill for more than $100,000 that is not covered by health insurance.