A Wisconsin firm shuttered after massive recalls of alcohol wipes blamed for illnesses and deaths is suing a vendor who canceled orders and refused payment after reports of bacterial contamination became public.
The Triad Group of Hartland, Wis., claims that a St. Louis firm breached its contract when officials from Vi-Jon Inc. canceled nearly $500,000 in orders for Germ-X, the company's popular line of antibacterial wipes and other products. In addition, Vi-Jon refused to pay Triad nearly $145,000 for products already delivered, according to a lawsuit filed in U.S. District Court in Wisconsin.
Vi-Jon canceled its orders on Feb. 22, more than a month after Triad and its sister company, H&P Industries Inc., recalled millions of alcohol pads because of possible contamination with a rare bacterium, Bacillus cereus.
The cancellation came a week after msnbc.com first reported that a Houston couple had sued Triad, alleging that a contaminated alcohol pad supplied to a hospital the firm led to their son's death from a meningitis caused by Bacillus cereus.
But Triad's lawsuit alleges that Vi-Jon's particular products weren't affected and that company officials were acting "based only on speculation of contamination."
"There is no evidence of any such contamination affecting any such Germ-X products," the lawsuit contends.
Vi-Jon officials are seeking dismissal of the suit, claiming that the recalled products were similar enough to Germ-X to cause worry after a massive public recall and that the company had a right to halt its orders.
"It was required in order to protect Vi-Jon's product and reputation," the firm's response said.
Vi-Jon has contracted with the Triad Group for years, sending supplies to Wisconsin firm to be processed into Germ-X products. Before the cancellation, Vi-Jon had forecast an order of 12,000 cases of products per month for 2011, the suit said.
The latest skirmish comes weeks after Triad officials posted a $4 million penal bond, part of the first of several requirements mandated by a consent decree implemented after federal officials shut down the company in mid-June, according to a U.S. justice department spokesman.
More than $6 million in Triad products were seized by federal marshals and the firm was slapped with a permanent injunction prohibited from manufacturing or distributing medical products until it submits a reconditioning plan approved by federal regulators.
At least nine lawsuits have been filed in multiple states by people who claim that contaminated wipes and other Triad products led to life-threatening illnesses. Two lawsuits, including the Houston complaint, say the products caused death.
A lawyer for Vi-Jon said the company doesn't comment on pending lawsuits; officials from Triad did not immediately respond to requests for comment from msnbc.com. News of the lawsuit was first reported by the Milwaukee Journal Sentinel newspaper.