A popular ice cream company that produces products for major brands like Hershey's and Friendly's has filed for bankruptcy after a listeria contamination crisis. Totally Cool Incorporation, based in Maryland, announced its Chapter 11 bankruptcy on August 23rd.
The recall was triggered in June after tests revealed the presence of listeria monocytogenes, a bacteria that can cause serious illness, especially in young children, seniors, and people with weakened immune systems. The FDA issued a warning about the potential health risks associated with consuming contaminated products.
Due to the recall and subsequent halt in production, approximately 68 of Totally Cool's 71 employees were laid off. The company listed liabilities between $1 million and $10 million and assets between $500,000 and $1 million in its bankruptcy filing.
Totally Cool's products were distributed nationwide through retail stores and direct-to-consumer delivery services. The company plans to restructure its operations to pay back its creditors, which range from 50 to 99.
One of the impacted brands, Taharka Brothers Ice Cream, had contracted Totally Cool to produce two of its most popular flavors, Honey Graham and Key Lime. Despite no listeria being detected in their ice cream or the facility, Taharka agreed to a full recall as a precautionary measure. The company has since resumed production of these flavors at its own factory.
While listeria infections are rare in the United States, they can lead to serious health consequences, including high fever, severe headache, stiffness, nausea, abdominal pain, and diarrhea. Pregnant women are particularly vulnerable to listeria due to the risk of miscarriage and stillbirth.
The CDC estimates that approximately 1,600 people in the U.S. contract listeriosis each year, with 260 fatalities. Past outbreaks have often been linked to unpasteurized dairy products, ice cream, raw produce, and undercooked meats.
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