Medical Products Maker Files Bankruptcy to Halt Lawsuits
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Medical Products Maker Files Bankruptcy to Halt Wave of Lawsuits

September 17, 2012


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Triad Group, a Wisconsin-based manufacturer of medical products, is filing for bankruptcy in order to thwart dozens of product liability lawsuits, according to a report from the Milwaukee Journal-Sentinel.

Sources say the company, which was recently forced to close by federal regulators, is the defendant in more than 50 different lawsuits related to defective products.

And while the bankruptcy filing could save Triad Group and its sister company, H&P Industries, millions of dollars, it is "terrible if you’re the plaintiff," according Ralph Anzivino, a professor of law at Marquette University.

According to Anzivino, by filing for bankruptcy, Triad will be able to put all of the lawsuits into the bankruptcy case, where plaintiffs will likely receive much less than they are asking for.

In fact, many plaintiffs may only receive a tiny fraction of the damages they have requested. This plan, however, may be the only feasible way for Triad to remain financially afloat. Sources say the company has $33 million in debt, compared with just $8.6 million in assets, and is facing lawsuits in 19 different states.

And the company has already taken active measures to gather funds to help settle the pending claims, including attempting to sell its 277,000-square-foot factory.

Triad's path to bankruptcy began in January, 2011, when it and H&P Industries voluntarily recalled all of its alcohol wipes and swabs after the Food and Drug Administration (FDA) discovered that some items were contaminated with deadly bacteria.

This bacteria, sources say, was responsible for the death of Harry Kothari, a 2-year-old boy in Houston, Texas. After this discovery, the FDA shut down the Triad plant in April, 2011, and U.S. marshals seized roughly $6 million worth of the company’s products.

The FDA’s swift response offered a stark contrast to its previous treatment of the company. Local sources claim that the FDA knew about serious health issues at Triad for at least 10 years but had failed to adequately police the company’s manufacturing process.

Shockingly, federal investigators have heard reports of at least 11 deaths that may have been connected to the tainted alcohol wipes, although Triad has insisted that its products were not responsible for the deaths.

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