PCA Investigation: Anatomy of A Recall
FDA has a short video "anatomy of a recall" about the investigation of the Salmonella outbreak and recalls associated with Peanut Corporation of America (PCA). Anyone interested in learning how the federal government (with the help of Minnesota's "Team Diarrhea") goes about a food borne illness investigation and recall should take a look.
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PCA Files for Chapter 7 Bankruptcy
It will come as no surprise that Peanut Corporation of America has filed for bankruptcy protection in the Western District of Virginia.
According to the bankruptcy filing, PCA claims to have debts of only between $1 and $10 million, and between 100 and 199 creditors. My colleagues in our Business Finance and Insolvency group tell me there is little penalty for any inaccuracies in these particular boxes on the cover sheet to a bankruptcy filing.
Two points are critical: they filed for Chapter 7 liquidation, not Chapter 11 reorganization. While voluntary Chapter 7 filings are not typical, they are less unusual than you might think.
The other point comes from a box checked on the cover sheet. It reads, "Debtor estimates that, after any exempt property is excluded and administrative expenses paid, there will be no funds available for distribution to unsecured creditors."
Tort clamants, i.e., the victims and families of victims, are unsecured creditors within the meaning of the Bankruptcy Code. In essence, PCA's assets, such as they are, are being turned over to its banks, and except to the extent of any insurance that may be available, the victims will have no recovery from PCA.
PCA President Parnell Pleads Fifth Amendment Before House Committee
Stewart Parnell, President and owner of Peanut Corporation of America, appeared before a subcommittee of the House Committee on Oversight and Government Reform today. The hearing did without his testimony, howevver, as he pleaded the Fifth Amendment.
As we try to follow the breaking news (including, sadly, a ninth death linked to the salmonella in PCA peanuts), small things tend to stand out. One of them is that the PCA website, which we have linked to before, contains nothing but press releases, links to outbreak-related websites, and the address of PCA's registered agent for service of process: Ct Corporation System
1201 Peachtree St Ne # 1240, Atlanta, GA 30361
For help in following the story, the AP has posted a nice timeline of events. If we know anything, we know it will need supplementation.
Upcoming Hot Topics in Food Law Teleconfernce
UPDATE - This panel will address emerging issues related to the recalls and investigations related to the Peanut Corporation of America. The panel includes persons intimately involved with these issues. Anybody with an interest in the peanut recall should register and tune-in.
The American Bar Association is presenting its second Hot Topics in Food Law teleconference on February 10, 2009 at 10am Pacific Time (1pm EST). Anybody connected with the food industry and concerned with risks affecting the industry should consider registering. I have been involved with planning this event. No other use of 60 minutes will give you as much insight into the most current issues in food law. The cost begins at $35 for section of litigation members and ranges to $150 for non-ABA members.
The panel, moderated by Jessie Ziegler at Bass, Berry & Sims, PLC, Nashville, TN, includes the most diverse voices available:
Robert E. Brackett, Ph.D, Senior Vice President and Chief Science and Regulatory Affairs Officer, Grocery Manufacturers Association, Washington, DC
Ricardo Carvajal, Of Counsel, Hyman, Phelps, & McNamara, PC, Washington, DC
Stephen Gardner, Director of Litigation, Center for Science in the Public Interest, Dallas, TX
Sherry A. Marcouiller, Chief Counsel, Food Law, Kraft Foods Global, Inc., Northfield, IL
