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Subscribe to RSSA pair of Wisconsin companies that made contaminated alcohol wipes blamed for the death of a toddler and several other people filed for bankruptcy this week after a flurry of lawsuits, their lawyers confirmed on Friday.
Triad Group and H&P Industries filed for Chapter 11 bankruptcy to help protect their assets from creditors, a provision that would let them stay in business.
“H&P and Triad filed for Chapter 11 bankruptcy protection late yesterday,” their lawyer, Steven Silton of Hinshaw & Culbertson, LLP, said by email. "The litigation involving the alcohol prep pads has created somewhat of a feeding frenzy," Silton said later in a telephone interview. The companies' insurance has run out, he added. "Their goal is to restructure and come out of bankruptcy."
The companies listed more than $37 million in liabilities against assets of less than $11 million, according to the Milwaukee Journal Sentinel, which first reported on the bankruptcy. Silton said it's not so clear-cut, as the assets include highly specialized equipment that would be worthless if the company went out of business, and the liabilities include lawsuits that the company is fighting.
The firms have been cited in nearly a dozen nationwide lawsuits alleging that the contaminated wipes or other products caused serious illnesses and death.
The family of a 2-year-old Houston boy, Harrison Kothari, alleged that he died after contracting an infection caused by Bacillus cereus, the bacteria detected in the H&P wipes. The boy’s parents, Sandra and Shanoop Kothari, settled their lawsuit with H&P Industries in April, according to court records and interviews.
Triad and H&P voluntarily recalled all their alcohol wipes and swabs in January. As of June, FDA officials said H&P Industries Inc. and the Triad Group of Hartland, Wis., remained closed under the terms of a federal consent decree that prohibits the firms from making or distributing products.
"We are going to, within 120 days, put a plan together that will show how we will pay creditors the maximum level we can," Silton said.
Related links:
JoNel Aleccia's series on the tainted wipes
Feds seize products at wipe-maker
Tainted wipes pulled from market
Parents of dead toddler settle tainted wipes lawsuit
Wipes test positive for bacteria
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So what happened here, was this a one time incident for H&P Industries? Did H&P sell contaminated products in the past?
Read JoNel Aleccia's series on the tainted wipes Link is just above.
I'm sure the number of people that were effected that went unreported, numbers in the 1000X's larger magnitude then the lawsuits. Can't make much of a case when the contaminated wipes used in your Dr.s office have been it the dump for months.
Here's a very detailed historical recap of the mis-steps of this company. Eric Haertle and his cohorts deserve to die. And I hope they burn in hell. jsonline.com/watchdog/watchdogreports/124552053.html
Is this what tea-republicans mean by TORT reform?? Your company's products kill people from lack of regulation and quality control and even though you knew about the problem, you file for Chapter 11 bankruptcy so you don't to pay the lawsuits and stay in business like nothing happened. Something is wrong with this so called business model, oh yeah I forgot, corporations are people too!! Well then the entire corporation, every employee should be sued because if corporations are people to, they shouldn't be allowed to incorporate as a company. You can't have it both ways, opps I forgot if you're tea-republican I guess you can or think you can anyway. Hopefully, the courts won't allow this company to kill anyone else until they close and then re-open under a different name, you know the game.
Typical corporate BS. By being allowing to a file Chp 11, they get an automatic stay, so they can keep running their business and protect their assets from lawsuits... and then the people who lost their child wont see a dime. Effing b*llsh1t, no wonder people are getting sick of corporations and the 1% mentality.
I guess you can't read since the article explicitly stated the family of the two year old settled in April.
I should have been more clear -- I meant anyone else post Chp 11 filing who was harmed by their product will be screwed because the filing automatically protects you from any lawsuit while under 11. The lawsuit for the 2yr old was filed pre-chp 11 which meant it could go forward.
The Capitalist Way is to privatize profits and socialize the losses. That's mine, I worked hard for it, and you can't touch it! And We the People get to suffer - and fund - the losses.
Just like the banks.
Thank God when Romney becomes president and the republicans are in control they can change the laws to make them more business friendly so that a select few can make more massive profits while the majority suffer.
Bankruptcy is more complex than the comments here suggest, especially an 11. Since their business has been shut down by the regulators (probably the right decision), how would they make money to keep paying their bills? Filing for an 11 is the only reasonable move for them here. Unless the company was badly undercapitalized to start with, then the ranking of creditors would ensure that the injured kids get paid off before the owners of the company, who are in fact the very last ones in line to be paid. $11M in assets goes a long way, and a lot of the $37M in debt is probably theoretical.
There is a devil lurking in the fine print of the bankruptcy code, though. Companies are getting better all the time at engineering illusionary financial problems into an excuse to file and then using the bankruptcy courts to bust their unions and raid their pensions. Watch the news, you are going to see this move pulled by a lot of major corporations over the next year or so (they will blame the "bad economy"). Easy way to detect the fraud: they come out of bankruptcy with more assets than they went into it with. Hard as it is to believe, clever (and technically legal) accounting tricks make this possible.
In all fairness, though, the government did set the example for them with the faked "S&L Crisis" in the 80's. The FDIC came in and took over hundreds of "failing" banks and then sold them off to bigger banks for a few hundred billion in profit. If the bank were failing, then how did the FDIC pay off all the debts and still make out like bandits selling what was left over?
like sharks in the water, the lawyers cyrcle there victoms....one tearing bite after another is inflicted untill there is nothing left. way to many companies go this way here in america now days....on a up side, pretty soon there will be none left for people to sue! (it will be a grand grand day when the lawyers finaly start haveing to sue each other into oblivion. (ps, peoples greed allows them to do it so they are as much to blame. every one wants to get rich quick without working for it) so this country will get what it very much deserves.
I guess if corporations would start putting their customers first instead of their bottom line and stop giving people a reason to sue there would be no reason to sue them, right? You do realize that people aren't allowed to sue for the fun of it right? There has to be a valid and legal claim to bring suit over. The reason for all the lawsuits is that corporations constantly try to get away with criminal acts and are called on it. You say people are just trying to get rich quick but I'd be willing to bet if it was a member of your family whose illness/death was caused by corporate malfeasance you'd be first in line at the lawyers office.
fix it man: The lawyers "cyrcle there victoms"? I'm not generally the spelling police, but good grief! Hard to take your comment seriously.
@fixit
I hope one day that you or one of your family members are killed by the corporations you hold so dear. It isn't so much the money as it is punishing the corporation for putting PROFIT before the safety of a human life. I'll assume by your statement that you would be happy to give the life of one of your own children so one of your wonderful corporations can stay in business and maybe even start an epidemic that could kill hundreds or thousands of innocent humans.
What planet are people like you from anyways???
What I don't understand is why we the people are so stupid that we keep putting the same sell outs back in office instead of new blood. Are we that stupid that we don't know whats going on or that much in denial that we hope if we do nothing it will all magically get better? For every cause their is an effect, politicians like to pretend these problems happen magically. The major problem is that we really don't hold all of our leaders accountable. We let them toss the hot potato of blame back and forth blaming each other. The truth is that they are all responsible for making excuses rather then solving problems while serving their own self interests then the country that they have sworn an oath to protect. We seem to have either totally incompetent people in power, totally corrupt people or both from what I can see of the direction that this world is heading.There was a reason that we had tariffs in the first place, Ross Perot warned of the giant sucking sound with free trade agreements while our so called leaders promised prosperity for all. You can't compete with countries that allow slave labor and the freedom to cut costs by not having any regulations. Instead of moving forward our so called leaders are taking us backwards to the days of slave labor, child labor, unsafe working conditions, products and pollution so that a select few can make massive profits while the majority suffer.
A person does something irresponsible and someone is killed... that's manslaughter.
A company does something irresponsible and someone is killed... they need to be protected from the low lifes trying to take their money.
I thought corporations were people!
Damn straight! Every single member of the leadership of said company should be thrown in prison for manslaughter. Full term incarceration. Your company knowingly substitutes a perfectly good ingredient with something similar that is much cheaper, but is also POISON, you get to rot for it. That was an executive decision to kill people for profit and the executive should suffer for it. But no, let's just go on arresting hundreds of thousands of harmless pot heads and cramming the jails with them for no reason while these uber rich yahoos get richer.
Good investment for Bain Capital. March the employees out. Rehire employees lower wages. Steal the retirement accounts of past employees,sell the assets. Walk away taking millions of dollars in cash. Rehire employees no longer have employment.
OMG - SHUT UP
No say it louder, shanaldo can't quite hear you.
Im sure this was caused by Democrat backed shyster lawyers who saw the chaking of money to fatten their pockets and that of democrats who refuse to limit these types of law suits against companies for billions.
Yes Im sure there are people who died and thosae who suffered from tainted wipes. Bt these law suits are the main cause of our health care rising. Insurance premiums for the doctors keep going up forcing the doctors to raise what they charge us. While these fat cat amulance chaser lawyers are laughing all the way to the bank.
There should be a set amount for compensation
2 million for deaths, 100,000 for ilnesses casued, 50,000 for pain and suffering. Plus reemburment for all heath care related to faulty products.
Then limit the lawyers to just 5% of what their client takes.
This looks like a corporate lead sleaze bag trick. Democrats don't work that way but some rich self interests idiots do. DO you really think a democrats would do this. They are to timid. Theses guys are deafeningly Republicans
LeftistReporting,
Actually, had you been watching this story earlier, you would know that the company was run and manned by people with NO medical or biological experience. FDA inspectors had issued citations for inadequate training of production staff, inadequate preparation and sanitation of the production equipment, failure to sterilize equipment effectively. In fact, the FDA identified the very bacteria responsible for the illnesses. The FDA actually shut these companies down last year, after recalling all extant product into quarantine. They later filed to reopen, although they hadn't brought in any professional training for production staff nor hired a trained professional quality manager with medical device background. They demanded the right to bring their product out of quarantine and "remedy" it by repackaging. 70% alcohol wipes potentially contaminated by bacteria with resistance of up to 90% concentrations.
Frankly, these brothers (who "run" the family business) don't deserve another chance.
@Leftist
Are you on meds??? I'm serious!
If you truly think this way you must have a very serious mental problem or you're just one of those people that will parrot anything they hear from one of their Teapublican pundits.
You really don't get much of anything, do you?
"The law is never the law. The law, if it were ever otherwise, has become a feather which men withpower use to tickle their private whimsies"--From the book, "The Making of a Country Lawyer" by Gerry Spence.
Business should not be allowed to file for Chapter 11. Since they are people and people cannot file for chapter 11, logically neither can businesses. One of the lawyers suing the company post--chap. 11 should make this case and see what happens to Citizens United.
Individuals most certainly can file for chapter 11 bankruptcy. Happens every single day.
Let us try this. How about educating yourself first?
kalesi, let's not be disingenuous - the rules for individuals are not the same. For example, to file any claim for bankruptcy an individual must completed credit counseling 180 days prior to filing, but nobody in a business is required to. This requirement was lobbied for by the banks who wanted to make it harder for consumers to file for bankruptcy. The fact that you have to attend counseling 6 months before filing makes it clear that the intent is to deny consumers the right to file and not really to improve their credit handling. The bank CEOs, however didn't want any hurdles in their way if they needed to file for bankruptcy.
That's why it is such a joke for guys like Romney to talk about individual responsibility. He made his money in a corporate environment that was designed to evade responsibility.
Kal,
I was trying to keep it short and to the point. I expected you to already know that C11 for people is way different from C11 for businesses. If businesses are people they must follow our C11 rules.
Isn't that typical: a company which makes a product which kills or sickens someone has none of its executives criminally charged and then claims bankruptcy in order to get out of paying for their actions. That's like a man murdering his wife, saying it was an accidenty and then getting out of paying for the funeral because he didn't have enough money to pay for it.
I love the title on the main page "Tainted wipe firms blamed for death file for bankruptcy".
They'll file for bankruptcy and all the execs will still get their bonuses.
"Silton said it's not so clear-cut, as the assets include highly specialized equipment that would be worthless if the company went out of business"
I call BS on this. There ARE other companies that makes the same products they do. I know this for a fact because I worked for these idiots (as polite as I can put it) several years ago. I also know that Dave Haertle recently sold his $1+ million home. They are not, and have not, been hurting for money.
I really was hoping that the consent decree and lawsuits would put them out of business for good so they could never make another red cent at the expense of the customer.
Pessa,
Yes, it was highly specialised, right. So highly specialised that they bought it used, Part of the problem was that their older model equipment was more difficult to sterilize. That, and no one in management who truly understood their product in terms of a medical supply. Used for hand scrubbing, injection and minor incision cleaning, and wound area cleaning.
Class action vultures.
Question - how much of the liabilities are due to legal fees vs. actual payment to those affected? Not like H&P is some mega bank blindly ripping people off - it's a bad circumstance that they try to correct and instead the lawyer feeding frenzy bleeds them dry.
Ah well, I'm sure it's for the greater good and the ensuing mass layoffs will be worth fueling the tort lawyer Gulfstreams and such...
Businesses that cause harm to people should not be given the luxury of filing for bankruptcy to get out of paying for the harm they caused!!!!!!!!!!
WE need to ask the question...WHO WAS GETTING PAID OFF??? 10 years of "problems" yet it wasn't closed down till people started tracing bad product back to them???
After a seemingly routine recall of alcohol pads in January 2011, the Journal Sentinel found federal regulators had known about problems at Triad Group and its sister company, H&P Industries for a decade but failed to take action.
As we know from asbestos litigation, bankruptcy is no protection.
As Executor for the estate of a deceased plaintiff in that case, I can say the attorneys are still churning ... on to seventh generation "successor" companies ... the two companies involved in the original case were long gone 45 years later. But their successor companies ... 26 in all [now liquidated or in bankruptcy] ... are still paying claims 65 years after the fact.
A system gone amok.
See, if you're a company the makes a product that kills people, you can hold on to assets through bankruptcy, but if you're a homeowner who lost your job and can't make your house payments, bankruptcy won't help you keep your house.
That's because corporations have nearly all the rights a person has, but few of the responsibilities.
You only got that half right. Corporations have more rights than a person has, and none of the responsibilities.
Spot on.
But how many Americans swoon when they hear phrases such as "pull yourself up by your bootstraps!" or "We need to shrink government / cut taxes!"
Free Market has become a religion in this country and too many people have been trained (brainwashed) into defending it at all costs, regardless of the consequences.
People will only wake up when they and their families are literally starving in the streets. Until then, most will continue to support Austerity for the 99% and Wealth for the 1% in the misbegotten belief the wealthy "work hard" and if we give them enough they will "trickle" some $$ down on us.
Bankruptcy?? The company board and execs should be in jail! I really hate how white collar criminals can hide behind corporate "entities" to avoid being held culpable. Perhaps if more of them ended up in jail, they would be more careful with their production environments.
Having worked in mfg plants for over 30 years, I know how "managers" look the other way when products pose a consumer danger. Production output always trumps product quality or safety. They need to held personally accountable for their bad behaviour.
Invisible Hand of the Free Market.
The exec's and those who made $$ off of this will be well protected and walk away just fine.
Thank God under Romney/Ryan this can never happen. They'll make it illegal to publish any information that leads to criticism of any company, or of free market capitalism. They'll make it illegal to sue. They'll make it illegal to have health insurance. They'll protect companies by giving govt bailouts to the wealthy owners of these companies to protect them from the greed of dead children. So what if children die? They're only middle class or poor. They're replaceable. This is good, free market, GOP, conservative economics.
Under Romney/Ryan, if the poor and middleclass don't like contaminated alcohol wipes, then they don't have to buy them.
Remember, the TP/GOP want smaller government so it will fit up women's vaginas.
What does this have to do with politics??!! These companies should be out of business and the so-called regulators should have done it years ago when they knew of serious problems but did nothing.