Judge Recommends Settlement in Virginia Salmonella Case

August 27, 2010

A federal judge is recommending approval of a $12 million settlement for those sickened or killed in last year’s salmonella outbreak tied to a Virginia-based peanut processor.

U.S. Magistrate Judge Michael Urbanski issued his recommendation late Wednesday for the payments for the more than 120 personal injury claims related to the outbreak. The settlement must now be approved by a bankruptcy court judge.

The outbreak traced to Lynchburg-based Peanut Corp. of America’s plants in Georgia and Texas was linked to the illnesses of about 700 people and the deaths of at least nine.

Peanut Corp. filed for Chapter 7 bankruptcy to dissolve amid fallout from the outbreak.

The money provided by the company’s insurers will be distributed based on the extent of victims’ illnesses.

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