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E. coli outbreak leads to bankruptcy for 2 businesses

If you love to eat, then you know that with food there is always a risk of getting sick. In 2016, there was an outbreak of E. coli, a dangerous bacterium that can lead to hospitalization and death. Of the people infected throughout the United States, including one person in New Jersey, 12 ended up in the hospital. Nine developed hemolytic uremic syndrome, which is a type of kidney failure linked to E. coli infection.

What made this outbreak interesting was that the majority of people who fell ill were below the age of 18. The culprit, SoyNut Butter manufactured by Dixie Dew, was linked to the outbreak.

After the serious health concerns, I.M. Healthy, the brand of SoyNut Butter, and Dixie Dew both filed for Chapter 7 bankruptcy. The companies paid all insurance proceeds into the bankruptcy, which amounted to over $11 million. The 26 individuals affected and who filed claims had their claims valued. They were valued at between $25,000 and $25 million individually, up to a shocking $70 million in total damages.

Due to the bankruptcy, each person was told last October that they'd receive part of the $6 million. The balance, $5,2 million, is what remains and will likely be paid to the victims in 2019. Litigation against the retail and supply chain companies can then continue.

When food companies don't take precautions, claims leading to bankruptcy can be the result. A company's Chapter 7 bankruptcy can help give the victims of an E. coli outbreak the compensation they need while also helping relieve a company or companies of their liability in the situation. This is something any major company could have to deal with.

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