US importer files for bankruptcy citing Chinese melamine crisis debts

By Mark ASTLEY contact

- Last updated on GMT

Related tags: Milk, Powdered milk

US importer files for bankruptcy citing Chinese melamine crisis debts
US import-export firm Exim Brickell has filed for bankruptcy citing debts of $200m following the loss of several lawsuits connected to its involvement in the shipment of Chinese melamine-tainted milk powder in 2008.

Earlier this month, the Miami-based firm filed a Chapter 7 bankruptcy petition at the US Bankruptcy Court in the Southern District of Florida, detailing debts of just over $204m.

Among its creditors, Exim Brickell owes $75m in court-ordered repayments, damages and interest to Bariven –  the Venezuelan state-owned company it supplied melamine-tainted Chinese enriched milk powder to five years ago.

In 2008 - in the midst of a food shortage in Venezuela - Bariven contracted Exim Brickell to purchase 26,000 tonnes of enriched milk powder with a value of $124.41m from China or India.

It was later revealed that some the monthly shipments, which started in June 2008, which were contaminated with melamine.

In 2011, a Florida District Judge accepted claims by Bariven that Exim Brickell had received early hints about the contamination issue before an international alert was issued, but chose not to share the information.

International alert

In 2008, six children died from kidney stones and kidney damage and around 300,000 people were sickened in China after consuming milk powder tainted with melamine. The nitrogen-rich substance, which is typically used to produce plastic and fertiliser, was added to milk that had been watered-down to artificially increase its apparent protein content.

In mid-September 2008, international alerts were issued regarding the adulteration.

Bariven claimed in its 2011 lawsuit that it contacted Exim Brickell on 19 September 2008 to query whether the milk powder it had purchased was impacted by the alert. Exim allegedly claimed that the producers and the type of the powdered milk purchased were not implicated in the alerts.

According to the lawsuit, both pieces of information later proved to be incorrect, but Exim Brickell never passed this information on to Bariven.

The Florida-based firm also allegedly provided Bariven with test results declaring that samples taken from earlier shipments were free of melamine.

This information also turned out to be inaccurate, as the samples detailed did not correspond to the shipments actually sent to Bariven.

While the company’s debts total $204m, it reported just $300 worth of assets in its bankruptcy petition – including two desks, six chairs, three staplers, and a computer and monitor.

Related topics: Regulation & Safety, Nutritionals

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