Heinz Wants Federal Judge to Arbitrate after Baby Food Recall

Published By : 19 May 2015 | Published By : QYRESEARCH

H.J. Heinz Co. is faced with US$30 million in losses after recalling the lead baby cereal that was found contaminated in China. Now the company wants a federal judge to dip on its insurer. The recall happened after the Provincial Food and Drug Administration of Zhejian announced on August 18, 2014, that it had sealed many boxes of high on protein, dry baby cereal of Heinz after the test results disclosed that the product included high levels of lead, as stated in to the complaint filed on Thursday.

Heinz notes that the accidental contamination included a single manufacturing cycle of a single element in its product, that is, the de-fatted soy powder manufactured by Qingdao Longhi. Almost 1,500 boxes of the cereal were disposed ultimately, and Heinz states that it has provided notice of the loss to its insurer, namely Starr Surplus Lines Insurance Co., on August 5, 2015.

Anticipating its continuing loss, which will eventually cost the ketchup king a whopping sum of US$30 million, Heinz says that it has given the Texas-based Starr thousands of pages of the information and documents. Apart from having responded quickly to any of requests by Starr, the company states that it made its employees available, worked with a claims manager, made forensic accounting records accessible, and met with forensic accountant of Starr many a times.

Out of nowhere, Starr has asked for Heinz assistance in its attempt to transfer liability to another party under subrogation rights, as stated in the complaint. After agreeing at the outset with Heinz's loss calculation, Star Surplus announced that it supposedly disputes Heinz's loss calculation, for the first time on May 1, 2015, the complaint says.
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