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Salmonella Settlement: Outbreak Victims Receive $12 Mill

The Atlanta Journal Constitution reports that over the next few months, victims of the 2008 salmonella outbreak will begin to see their money from the $12 million dollar settlement struck with the insurer of the now defunct Peanut Corp. of America. The Lynchburg, Va., based company was found to be responsible for the outbreak that affected more than 700 people in 44 states between September 3 and December 31, 2008.

According to the The Journal Constitution, the proceeds to fund the settlement will not be coming from the bankruptcy or sale of assets from the now defunct Peanut Corp., but from the insurance policy the company held, issued by the Hartford insurance company. The Blakely plant was found to be the source of the salmonella outbreak which killed nine people sickened more than 700 after they consumed peanuts or peanut products such as paste or peanut butter originating from that facility.

As discussed in a prior post in this blog, several health code violations and illegal practices were discovered at the Peanut Corp's Georgia plant. This included at least 10 examples of batches of peanut products testing positive for salmonella contamination. The batches were retested until negative results came back and then shipped to distributors.

The settlement will be apportioned among the 123 victims who filed their claims by the October 31, 2009, deadline. The highest payments will of course go to the family members of those who died as a result of the salmonella outbreak. An additional $750,000 from the Hartford settlement will go toward paying administrative costs and lawyers’ fees.

The Journal Constitution reports that there are still cases pending against companies that used Peanut Corp.’s products, including big names such as Kellogg Co. and King Nut Co.

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