Judge recommends $12M settlement on bad peanuts

By MICHAEL FELBERBAUM AP Business Writer

RICHMOND, Va. (AP) - A federal judge is recommending approval of a $12 million settlement for those sickened or killed in last year's salmonella outbreak tied to a Virginia-based peanut processor.

U.S. Magistrate Judge Michael Urbanski issued his recommendation late Wednesday to pay more than 120 personal injury claims related to the outbreak. The settlement must now be approved by a bankruptcy court judge.

The outbreak was traced to Lynchburg-based Peanut Corp. of America's plants in Georgia and Texas and linked to at least nine deaths and 700 illnesses.

Peanut Corp. filed for Chapter 7 bankruptcy to dissolve amid fallout from the outbreak.

The money provided by the company's insurers will be distributed based on the extent of victims' illnesses.