Peanut Corp. of America files for bankruptcy
- February 16, 2009
The Lynchburg-based peanut company embroiled in a salmonella outbreak that has caused more than 600 illnesses has filed for bankruptcy. Peanut Corp. of America filed for Chapter 7 bankruptcy, which likely means the company will fold. This type of bankruptcy allows company’s to sell its assets to pay debts. The Food and Drug Administration traced the salmonella outbreak to a the company's peanut-processing plant in Georgia. PCA President Stewart Parnell and Sammy Lightsey, the manager of the Georgia planted, were called before a Congress subcommittee in Washington, but both refused to testify citing their Fifth Amendment rights against self-incrimination. The company closed its plants in Georgia and Texas and its products were recalled. The U.S. Department of Agriculture suspended the company and its Suffolk plant, meaning it could no longer do business with the government. With those considerations, the company’s directors decided it had no choice but to liquidate. (The News & Advance).