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Lawsuit names Kellogg's plant in Clearfield

Published October 30, 2009 7:36 am

Litigation » Dispute over Gardenburger recall pits ex-owner against corporation.
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The Kellogg Co. is attempting to shift the blame for its recall of Gardenburger products onto the former owner of a Clearfield plant where the veggie patties are manufactured, a lawsuit alleges.

Annex Holdings, former owner of Wholesome & Heart Foods Co., filed a reply on Wednesday in its lawsuit against the food conglomerate in New York Supreme Court.

After Kellogg bought the Clearfield plant in November 2007, it purportedly began a major construction project. Six months later, Kellogg withdrew Gardenburger products from the market, publicly calling into question conditions at the plant, it is alleged.

Annex is seeking to force Kellogg to release $10 million held in escrow as part of the Gardenburger deal.

"It's unfortunate that Kellogg is trying to pass the buck for its plant sanitation issues," said Annex attorney Robert Forman. "Kellogg's apparent claim that it conducted no due diligence on food-safety issues prior to acquiring Gardenburger is unsettling, given Kellogg's supposed commitment to consumer safety."

Kellogg spokeswoman Susanne Norwitz said the company does not comment on pending litigation, which she called "a contract dispute between a buyer and a seller."

"That said," she added, "Kellogg has a long-standing commitment to upholding high-quality standards with our food and operations and have been doing so for more than 100 years."

The lawsuit alleges that Kellogg has never disclosed what was wrong with the withdrawn Gardenburger products or the specific construction conditions that led to the voluntary recall.

About 100 people are employed at the northern Utah plant, according to Utah officials.

Gardenburger makes varieties of burgers from vegetables, beans and other meatless ingredients. The firm opened its Clearfield plant in March 1998, and soon moved production facilities to the city's Freeport Center.

By 2003, Gardenburger was distributing its patties to more than 30,000 food-service outlets nationwide and in Canada.

Kellogg, headquartered in Battle Creek, Mich, is one of the world's leading producers of cereal and convenience foods, with annual sales of nearly $13 billion.

The New York-based Annex Capital Management, general partner of Annex Holdings, is a private equity group.

In a written statement, Annex officials said the Gardenburger withdrawal "is not the first time that Kellogg has faced food-safety and product-quality issues."

Annex points to September when Kellogg recalled 4,500 cases of Eggo waffles and Eggo pastries after the Georgia Department of Agriculture found listeria monocytogenes bacteria in a sample. The product had not been shipped into the marketplace and no illnesses were reported, according to the U.S. Food and Drug Administration.

Annex also cites another recall earlier this year in connection with a potential salmonella contamination at a facility owned by one of Kellogg's suppliers. The FDA traced the outbreak to Peanut Corp. of America's Georgia plant. Peanut Corp. had distributed peanut butter and peanut paste to institutions and food companies nationwide.

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