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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation

Topps files for bankruptcy after massive beef recall

Jeffrey Gold, AP’s "E. coli guy," in New Jersey filed the story that had been rumored about for weeks about Topps Meat Company’s Chapter 7 Bankruptcy.  Topps has up to 10,000 creditors (including several of my clients) and liabilities of up to $100 million, according to its Chapter 7 filing in U.S. Bankruptcy Court in Newark.  Interestingly, Topps put its assets in the same range.

As you recall, Topps closed its doors on October 5, six days after it issued the recall of 21.7 million pounds of frozen hamburger.  In September, the USDA said three people were confirmed as getting E. coli from Topps products, with 22 other cases under investigation. According to the CDC, cases were found in Connecticut, Florida, Indiana, Maine, New Jersey, New York, Ohio and Pennsylvania.  That number has grown to at least 40.  We have filed two lawsuits on behave of victims (two develpoded HUS) in New York and are investigating the claims of 24 others.  We filed a similar lawsuit against Topps in 2005 – bet they wished they would have listened then.  In early December we will be visiting the now empty plant.

Interestingly, also listed as creditors are Tyson Foods Inc., of Chicago, and the U.S. Department of Agriculture’s Food Safety and Inspection Service.  Another creditor appears to be Topps executive vice president Anthony L. D’Urso, a member of the family that ran Topps for about 60 years until a controlling interest was purchased in 2003 by Strategic Investments & Holdings, a private-equity firm based in Buffalo, N.Y.  That means that these and other creditors will compete with people injured by E. coli food poisoning – that is going to be an interesting fight over the corporate corpse.

Although, Topps has listed $12,000,000 in insurance to cover the claims of the victims of the E. coli outbreak, with at least 40 ill, and punitive damage claims, retail outlets (stores that sold the product) and the suppliers of the meat, are clearly going to be brought into the case once the bankruptcy stay has been lifted.  I also really want to subpoena USDA/FSIS officials.  The bottom line for us is that we intend to make sure our clients are fairly compensated AND we find out when both Topps and the USDA knew about the extent of the E. coli contamination and why the recall took weeks to occur.

I have also had a few email chats over the last 24 hours with Law Firm Blogger (who has a significant background following bankruptcy cases).  I appreciate her insight and her post today, and her article today.