We all know that food recalls can have serious consequences for consumers. Contaminated food often sickens people, sending them to the hospital, or can even cause death.
However, food recalls can also significantly affect the businesses whose products are being recalled, as evidenced by what has happened to Totally Cool, a Maryland-based ice cream treat maker that makes products for various brands.
The company has now filed for bankruptcy after 60 of its ice cream treat products were recalled this past June due to fears over potential Listeria monocytogenes contamination.
Thankfully, no illnesses are known to have been linked to the recall, but still, the recall had extremely negative consequences for the ice cream producer.
As The Baltimore Banner reports, Totally Cool filed for Chapter 11 bankruptcy last Friday and, as a result, had to lay off 68 of its 71 employees. The decision to file for bankruptcy and lay off all but three employees was the result of a Food and Drug Administration (FDA) order for Totally Cool to shut down all of its production lines. Court documents said this cessation led to “the loss of all revenue streams.”
We’ve reached out to Totally Cool for comment and will update this post if we hear back.
Totally Cool hopes the bankruptcy proceedings will allow the company to pay back the money it owes creditors, of which it has between 50 and 99. In total, the company has between $1 million and $10 million in liabilities.
According to Totally Cool’s website, the company had been manufacturing “ice cream cakes and creations” for more than 20 years. Its customers included leading ice cream brands, grocery retailers, and wholesale distributors.