Deal gives salmonella victims $12 million

By Bob Keefe

The Atlanta Journal-Constitution

About 120 victims of last year’s salmonella outbreak or their families — along with their attorneys — will split about $12 million as part of a settlement with the insurer of Peanut Corp. of America.

Alan Maxwell, the Atlanta attorney handling the settlement, said victims could start to see their portion of the settlement over the next several months.

The money doesn’t come from the bankrupt Peanut Corp. or the sale of its assets, including equipment and other property at the company’s now-infamous Blakely plant, where the salmonella outbreak originated. Proceeds from the asset sales will go to Peanut Corp. creditors, say attorneys.

The $12 million comes from an insurance policy that Lynchburg, Va.-based Peanut Corp. had with the Hartford insurance company. To be eligible, victims or their survivors had to file a claim by last Oct. 31 as part of Peanut Corp.’s bankruptcy settlement.

An additional $750,000 from the Hartford settlement will go toward paying administrative costs and lawyers’ fees.

Victims will not get an equal share of the money. The size of the settlements will be determined based on losses; death cases will get the most.

The number of claimants — 123 in all — was relatively small for the size of the outbreak. Nine people died and more than 700 were sickened at last count from eating peanuts and peanut paste traced to Peanut Corp. But the settlement with Hartford is likely only a start for many victims.

Other lawsuits are pending against companies that used Peanut Corp.’s products, including food giants Kellogg Co. and King Nut Co.