14 Feb 2009

Peanut company files for bankruptcy

11:58 am on 14 February 2009

Peanut Corporation of America has sought bankruptcy protection after a salmonella outbreak traced to one of its plants led to one of the biggest product recalls in US history.

The company filed a Chapter 7 bankruptcy petition on Friday in the US Bankruptcy Court for the Western District of Virginia.

Under Chapter 7, companies liquidate their assets to repay creditors rather than reorganize.

The salmonella outbreak has sickened 600 people, more than half of them children, and may have killed nine people. It has been traced to a plant in Blakely, Georgia, operated by Peanut Corporation.

More than 1800 products have been recalled since mid-January due to the outbreak.