Colorado Farm Linked to Deadly Listeria Outbreak Files for Bankruptcy
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Colorado Farm Linked to Deadly Listeria Outbreak Files for Bankruptcy

June 8, 2012

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A large cantaloupe growing operation in southeastern Colorado is filing for bankruptcy after causing an outbreak of listeria that killed at least 32 people, according to a report from the Denver Post.

Jensen Farms, a massive melon grower in the arid plains of southeastern Colorado, filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court in Denver, as it continued to struggle with millions of dollars in insurance fees and court costs linked to several wrongful death lawsuits.

Listed among the company’s primary creditors are several plaintiffs who filed lawsuits against Jensen Farms after the tragic outbreak, which caused at least 32 deaths and hospitalized dozens of other victims, sources say.

The plaintiffs in these lawsuits were initially concerned that Jensen Farms was hiding under the protection of bankruptcy, but the company’s bankruptcy attorney told reporters that the group hopes to use bankruptcy “as a mechanism to help get them paid, as quickly as we can distribute it to victims.”

In its Chapter 11 filing, the farm told the court that it had earned almost $5 million in revenue during the past year alone. However, it also told the court that it holds at least $2.5 million in debt, and only has $2.1 million in assets.

Interestingly, Jensen Farms is also owed $1.6 million by Frontera Produce, which is the distributor to which the farm initially sold its cantaloupes. Frontera, too, has been the target of numerous lawsuits, just like retail outlets and independent auditors that confirmed the safety of the cantaloupes.

Sources say that the outbreak of listeria caused by the farm’s cantaloupes was one of the deadliest food illness outbreaks in the United States in the last 100 years.

According to an FDA investigation, the farm caused the outbreak by using potato-harvesting machinery to clean the cantaloupes, which contaminated the fruits.

In addition, the FDA scolded Jensen Farms for failing to perform a key chlorination stage during that cleaning process that helps kill bacteria.

Fortunately for the farm, it does carry millions of dollars in liability insurance, but this safety net will not likely cover all the losses that are sure to arise from the wave of wrongful death lawsuits that were recently filed.


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