CHI-CHI'S Chain pays $2 million in settlements

The settlement pays 60 claims from the largest U.S. outbreak of the disease.
WASHINGTON (AP) -- The bankruptcy court overseeing the Chapter 11 case of Chi-Chi's Inc. authorized the restaurant chain to pay more than $2 million in settlements to customers who suffered from an outbreak of hepatitis A at a restaurant in western Pennsylvania, according to court papers obtained Tuesday.
The order, signed last week by Judge Charles G. Case of the U.S. Bankruptcy Court in Wilmington, Del., and made available Tuesday, authorizes the Tex-Mex eatery to pay 60 claims totaling $2.18 million.
The settlements stem from the largest outbreak of hepatitis A in U.S. history, the focal point of which was a Chi-Chi's restaurant at the Beaver Valley Mall.
About 600 people contracted the disease last year from contaminated green onions shipped from Mexico. The outbreak was blamed for four deaths.
Who's to blame
Officials with the FDA and the Centers for Disease Control and Prevention have said there was no way for Chi-Chi's to detect or prevent the contamination.
The bankruptcy court has already authorized the settlement of any hepatitis A claims of $35,000 or less, according to court papers.
The company said it is required to notify the court when it has reached settlements over that amount.
Chi-Chi's said that of the 60 hepatitis A claims it has settled, five are for more than $35,000.
The company said the settlements are in its best interest because litigating the claims could prove to be more time-consuming and costly to its estate.
The parent companies of Chi-Chi's, FRI-MRD and Prandium Inc., both of Irvine, Calif., aren't included in the Chapter 11 case, which was initiated Oct. 8, 2003. But they were the subject of a prepackaged Chapter 11 plan under which they emerged from bankruptcy protection in June 2002.
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