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Peanut Corp. of America files for bankruptcy

UPDATED: 2:56 p.m.

ATLANTA (AP) -- The peanut processing company at the heart of a national salmonella outbreak has filed for bankruptcy.

The Virginia-based Peanut Corp. of America filed Friday for Chapter 7 bankruptcy protection in bankruptcy court in Lynchburg, Va. The company said in the filing that its debt and assets both ranged between $1 million and $10 million.

The salmonella outbreak was traced to one of the company's plants in Blakely, Ga., where inspectors found roaches, mold and a leaking roof. A second plant in Texas was shuttered this week. The outbreak has resulted in more than 500 illnesses, led to one of the nation's biggest recalls and caused as many as nine deaths.

The government is working on a criminal investigation into the case, and several lawsuits have been filed.

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STORY POSTED: 2:30 p.m.

Peanut Corporation of America has filed a bankruptcy petition. 

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Here is the full news release:

PEANUT CORPORATION OF AMERICA FILES FOR LIQUIDATION UNDER BANKRUPTCY LAW  

ROANOKE, VA. (February 13, 2009)-Peanut Corporation of America has filed for protection under the United States Bankruptcy Code.

"Given the events of the past month, including the broad-based recalls of the products sold by the company and its subsidiary in Plainview, Texas, the company has no alternative but to cease operations," said Andrew S. Goldstein of Magee, Foster, Goldstein & Sayers, a Roanoke, Va. law firm that specializes in bankruptcy and insolvency.

"This bankruptcy filing, while regrettable, will allow for an orderly liquidation of the company," said Goldstein, who filed the bankruptcy petition today. "It is in the best interest of creditors that all actions against the company be assembled under one roof," added Goldstein. 

The bankruptcy petition was filed in United States Bankruptcy court for the Western District of Virginia. Peanut Corporation's administrative headquarters is located outside Lynchburg in Bedford County.