February 2, 2009 / 4:57 PM / in 9 years

Maple Leaf reaches $25 million listeriosis settlement

<p>A sign for the Maple Leaf food processing plant is seen in Toronto in this August 21, 2008 file photo. The company said on Monday it has reached a tentative $25 million settlement in a series of class-action lawsuits related to an outbreak of listeriosis food poisoning that killed at least 20 people last year. REUTERS/Mark Blinch</p>

TORONTO (Reuters) - Maple Leaf Foods’ said on Monday it has reached a tentative $25 million settlement in a series of class-action lawsuits related to an outbreak of listeriosis food poisoning that killed at least 20 people last year.

The proposed settlement will still require court approval in Saskatchewan, Quebec and Ontario, with hearings set to begin next month.

The compensation is set at $25 million but could increase by $2 million if needed to fully compensate all eligible claims, Maple Leaf said in a release.

The amount each claimant will receive depends upon the severity of their illness, ranging from $750 for minor symptoms up to $125,000 for serious and long lasting physical injuries.

The estates of people who died as a result of the contaminated food will be paid $120,000, plus additional amounts to immediate family members.

The class action suits were launched following an outbreak of literiosis last summer that was traced back to deli-style meats produced at a Maple Leaf plant in Toronto.

Robert Gibson, an analyst at Octagon Capital, said the court hearings are the latest step for the company to move past the headline-grabbing incident.

“This is putting it behind them and they are moving forward and getting back to the normal business at hand,” Gibson said.

“The consumer is of the same mind because I am seeing more and more of the deli meats in the grocery stores.”

After an extensive investigation, the company said it believed two slicers at its Toronto plant had been harboring the listeria bacteria.

After a month-long shutdown, the plant was allowed to operate while officials from the Canadian Food Inspection Agency tested samples of all meats produced.

Chief Executive Michael McCain said in October the outbreak had cost the company about $33 million in the third quarter from product recalls and extra sanitation measures.

The company’s shares were down 1.5 percent at $10.74 on the Toronto Stock Exchange on Monday.

The cost of the settlement is expected to be covered by insurance.

Reporting by Scott Anderson; editing by Rob Wilson

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