Check your supplies: Bacteria infected alcohol wipes

Tainted wipe firms file for bankruptcy

By Maggie Fox, NBC News

A pair of Wisconsin companies that made contaminated alcohol wipes blamed for the death of a toddler and several other people filed for bankruptcy this week after a flurry of lawsuits, their lawyers confirmed on Friday.

Triad Group and H&P Industries filed for Chapter 11 bankruptcy to help protect their assets from creditors, a provision that would let them stay in business.

“H&P and Triad filed for Chapter 11 bankruptcy protection late yesterday,” their lawyer, Steven Silton of Hinshaw & Culbertson, LLP, said by email. "The litigation involving the alcohol prep pads has created somewhat of a feeding frenzy," Silton said later in a telephone interview. The companies' insurance has run out, he added. "Their goal is to restructure and come out of bankruptcy."

The companies listed more than $37 million in liabilities against assets of less than $11 million, according to the Milwaukee Journal Sentinel, which first reported on the bankruptcy. Silton said it's not so clear-cut, as the assets include highly specialized equipment that would be worthless if the company went out of business, and the liabilities include lawsuits that the company is fighting.

The firms have been cited in nearly a dozen nationwide lawsuits alleging that the contaminated wipes or other products caused serious illnesses and death.The family of a 2-year-old Houston boy, Harrison Kothari, alleged that he died after contracting an infection caused by Bacillus cereus, the bacteria detected in the H&P wipes. The boy’s parents, Sandra and Shanoop Kothari, settled their lawsuit with H&P Industries in April, according to court records and interviews.Triad and H&P voluntarily recalled all their alcohol wipes and swabs in January. As of June, FDA officials said H&P Industries Inc. and the Triad Group of Hartland, Wis., remained closed under the terms of a federal consent decree that prohibits the firms from making or distributing products.

"We are going to, within 120 days, put a plan together that will show how we will pay creditors the maximum level we can," Silton said.