U.S. Court Approves Pet Food Maker’s $24 Million Lawsuit Fund

Menu Foods Income Fund said Friday that a U.S. court gave preliminary approval to a settlement agreement covering lawsuits in U.S. and Canadian courts.

Menu Foods was was hit by more than 100 class action lawsuits last year after pet foods it distributed were found to contain toxic ingredients imported from China.

In March 2007, the company, whose products were sold under such labels as Iams, Eukanuba, and President’s Choice, recalled tens of millions of containers of wet dog and cat food.

Menu Foods said the settlement agreement, which was announced in principle in April, would resolve class action lawsuits filed in U.S. and Canadian courts.

The deal, given preliminary approval by the U.S. District Court for the District of New Jersey, calls for Menu Foods and its insurer to create a fund of $24 million to pay for up to 100 percent of damages incurred by pet owners, subject to certain limitations, the company said.

The fund will be operated by a neutral claims administrator and will be available to U.S. and Canadian consumers who purchased or obtained recalled pet food, it said.

Paul Henderson, chief executive of Menu Foods, said the company was pleased with the negotiated settlement, which he said will enable it to focus on rebuilding its business.

“If finally approved, the agreement will provide restitution to the pet owners affected by the 2007 pet food recalls,” Henderson said in a statement.

He reiterated the company’s previous statements that Menu Foods, other pet food producers and pet owners were victims of “a terrible fraud committed by a company in China.”

The recall, which involved more than 150 brands of dog and cat food, was tied to contaminated wheat gluten and rice protein concentrate imported from China.

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(Reporting by Lynne Olver; editing by Rob Wilson)