Court reserves decision on approval of €6.5m settlement involving firm at centre of pork products dioxin recall

THE High Court has reserved its decision on whether to approve a scheme of arrangement between a company alleged to have supplied animal feed containing harmful dioxins and those suing it arising out of the contamination.

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.

Yesterday, 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.

Ms Justice Laffoy said she hoped to be in a position to give judgment by September 10 next.

Under the terms of the scheme formulated by an expert it is proposed that the Co Wexford firm would pay out a total of €6.5 million, which is the maximum the company was insured for.

The proposed scheme would result in the €6.5m being divided between those who have brought proceedings against Millstream Recycling Ltd, Clohamon Mills, Bunclody and involves a stay on legal actions against it.

The total value of the claims Millstream was facing arising out of the contamination is €32.9m.

Urging the court to approve the scheme, Gary McCarthy, counsel for Millstream, said that at a meeting last July, more than 90% 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.

He said 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 it was in the interests of both creditors and the company.

Opposition to the court approving the scheme was brought on grounds including that parties within the scheme should not have been included in it because they had no direct contractual arrangement with Millstream and that the scheme lacks transparency.

Further objections to the court giving its approval were brought on behalf of parties not included in the scheme.

Those grounds were rejected by the company.

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 than the recognised safety limit.

The proceedings against Millstream arose after dioxins such as polychlorinated byphenyls (PCBs) were detected in the biscuit feed meal the firm 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, Mr McCarthy said.

Millstream had not tested the feed for PCBs because these had been banned in the 1970s and do not occur naturally.