Peanut Corporation of America (PCA), the peanut processor at the centre of the US salmonella scare linked to 637 illnesses and nine deaths, filed for Chapter 7 liquidation on Friday (13 February).
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PCA has come under fire for supplying retailers and food manufacturers with peanut products contaminated with salmonella. To date, more than 2,000 products have been recalled by a range of manufacturers and retailers.
Salmonella has been found at two of the company’s three production sites, triggering a recall of products manufactured by PCA in Blakely, Georgia, and Plainview, Texas.
Food safety inspectors uncovered poor hygiene standards at each facility – with a leak in the roof, mould, bird and rodent faeces and cockroaches found.
Late last week, PCA president Stewart Parnell appeared before Congress’s House Committee on Energy and Commerce. During the hearing, it emerged that PCA management manipulated salmonella testing procedures in order to ship products that had come back with positive result.
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By GlobalDataPCA filed for Chapter 7 bankruptcy protection the next day.
Chapter 7 allows a company to liquidate its assets and distribute the proceeds to creditors. The move indicates that PCA will not continue trading and no reorganisation plan has been formulated – as under Chapter 11 bankruptcy.
In a filing with a bankruptcy court in Virginia, PCA disclosed that its debt and assets both totalled between US$1m-$10m.
The move could complicate the growing number of civil lawsuits against PCA, as those who fell sick as a result of the outbreak seek compensation.
A number of cases have also been filed against Kellogg and King Nut Co., both of whom were supplied contaminated peanut products.
