Millstream Recycling Ltd has asked the Court to approve a scheme with more than 25 creditors who have brought actions against the firm over being supplied with contaminated feed. The company claims that it faces going into liquidation if the scheme is not approved, according to Irish Examiner.com.

The contamination, in December 2008, resulted in a recall of all Irish pork products after pig meat on a number of farms was found to have had between 80 and 200 times more dioxins that the recognised safety limit.

The proceedings against Millstream, Recycling Ltd, Clohamon Mills, Bunclody arose after dioxins such as polychlorinated byphenyls (PCBs) were detected in the biscuit feed meal its client makes for pigs and cattle.

Through no fault of Millstream, the PCBs were contained in oil Millstream had purchased to use in the feed manufacturing. Millstream had not tested the feed for PCBs because these had been banned in the 1970's and do not occur naturally.

on Saturday, 21 August, at the High Court Ms Justice Mary Laffoy reserved judgment following the conclusion of submissions from those in favour and parties against the scheme being approved. The judge said she would give her decision as soon as she could, and hopes to be in a position to give judgement on September 10 next.

Under the terms of the scheme it is proposed that Millstream would pay out a total of €6.5m, which is the maximum the company was insured for.

The scheme if accepted would result in the €6.5m being divided between those who have brought proceedings against Millstream and involves a stay on legal actions against it. The total value of the claims Millstream was facing from those included in the scheme arising out of the contamination is €32.9m.

Urging the court to approve the scheme Gary McCarthy Bl, for Millstream, said that at a meeting last July more than 90 per cent of creditors voted in favour of the arrangement with claimants where the €6.5m would be divided up between them. There was also the prospect that more money would be available to creditors at a later date.

Counsel said that if the scheme was not accepted, the company would face going into liquidation as clearly it would be insolvent. The company believed the scheme was the "fairest way" to treat all creditors, and that approving the scheme was in the interests of both creditors and the company.

Further Reading

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You can find out more information on the December 2008 dioxin incident by clicking here.