Soy Co-Op Files for Chapter 11 After FDA Recalls.

Posted on March 20, 2012 by

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By Stephanie Gleason

It’s been a rough few years for Thumb Oilseed Cooperative Inc. With its second product recall for salmonella in as many years, the Michigan soy product producer landed in Chapter 11 Monday.

Thumb Oilseed sells soy flour, soy grits and refined soy oil under the name Soy Beginnings, declaring all of its products are low carb, trans fatty acids free, organic and non-GMO. But first in February 2010 and then in October 2011, Thumb Oilseeds had to recall thousands of pounds of soy flour and soy meal based on possible salmonella contamination.

In both cases the FDA said that no illnesses had been reported.

The first recall came after the FDA said that it found 43 areas in the manufacturing facility to be contaminated with salmonella, tainting the products. Among the observations were one live bird in the “clean room” and 15 more flying in the “waste room.”

The recall caused retailers including Fresh and Easy and Trader Joes to pull 100,000 cases of granola bars from shelves as well as nearly 6,000 boxes of gluten-free cake and cookie mixes in 2010.

As a result, food manufacturer Ralcorp sued Thumb Oilseed for $7 million, according to the St. Louis Business Journal, the amount it said it lost in profits as a result of Thumb Oilseed’s conduct.

Thumb Oilseed and a lawyer representing the company declined to comment Tuesday.

The Ulby, Mich., co-op has 180 member soybean growers in 10 Michigan counties and said in court documents it is expects a relatively short Chapter 11 case involving a sale.

The filing comes on the heels of another Chapter 11 filing by a farmers cooperative after it had to recall products—Snokist Growers of Yamika, Wash.

Snokist filed for Chapter 11 after its applesauce sickened 18 schoolchildren in North Carolina, saying the FDA’s actions had lowered sales too dramatically for it to continue operating.

source: http://blogs.wsj.com/bankruptcy/2012/03/20/soy-co-op-files-for-chapter-11-after-fda-recalls/?mod=google_news_blog

Posted in: Family safety