Salmonella outbreak sinks Peanut Corp.
Last Updated: Friday, February 13, 2009 | 5:19 PM ET
The Associated Press
The U.S. peanut processing company linked to a deadly salmonella outbreak filed for bankruptcy protection Friday, a sign the beleaguered firm plans to cease doing business.
The Virginia-based Peanut Corp. of America filed for Chapter 7 bankruptcy protection, which allows for an orderly sale of the company's assets to pay creditors.
"It's regrettable, but it's inevitable with the events of last month," said Andrew S. Goldstein, a bankruptcy lawyer in Roanoke, Va., who filed the petition.
The U.S.-wide salmonella outbreak, which has been blamed for nine deaths and about 600 illnesses, has been traced to the company's plant in Blakely, Ga.
An inspection of the plant found roaches, mold and a leaking roof. A second plant in Texas was shuttered this week after preliminary tests came back positive for possible salmonella contamination.
A Canadian who purchased a product in the U.S. was among those who fell ill. The outbreak has resulted in a huge recall of products in both Canada and the U.S.
The U.S. government is conducting a criminal investigation into the outbreak and more than a dozen civil lawsuits have been filed.
Peanut Corp. president Stewart Parnell repeatedly refused to answer questions Wednesday before a congressional subcommittee. But emails surfaced indicating he directly ordered products the company knew were tainted to be shipped anyway.
Reached by telephone, Parnell said his lawyers had advised him not to talk. "If I could do it, I would," he said.
