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Sterilization company Cosmed Group Inc. has filed for Chapter 11 bankruptcy protection in a Texas federal court, citing liabilities exceeding $100 million, largely stemming from litigation related to cancer claims over its use of ethylene oxide gas. The company’s filing on Thursday lists debts ranging from $100 million to $500 million, owed to more than 200 creditors, while its assets are valued between $10 million and $50 million.

Cosmed Files for Chapter 11 : Cancer Claims and EPA Findings

According to the bankruptcy petition, eight of Cosmed’s nine largest unsecured creditors are tied to cancer-related litigation claims with unspecified damages. The allegations center on the company’s use of ethylene oxide (EtO) for sterilization, which has been linked to cancer risks.

A July 2022 report from the U.S. Environmental Protection Agency (EPA) highlighted concerns over Cosmed’s Franklin, New Jersey, facility, indicating that ethylene oxide emissions contributed to heightened cancer risks in nearby communities. However, the EPA also noted that Cosmed has implemented measures to reduce these risks.

Company Background and Business Operations

Cosmed Group operates under various trade names, including EtO Sterilization, Cosmed of PA, and Cosmed of NJ. The company specializes in the commercial sterilization and pasteurization of food products and offers sterilization consulting services. It is known for its patented steam pasteurization technology, which it markets alongside its sterilization services.

Although Cosmed is headquartered in Rhode Island and incorporated in Delaware, it opted to file for bankruptcy in the Southern District of Texas. This decision was influenced by the bankruptcy of its affiliate, Spicey Partners Real Estate Holdings LLC, which is also located in the district.

Court Proceedings and Case Details

The Chapter 11 case has been assigned to U.S. Bankruptcy Judge Chris Lopez in the Southern District of Texas. The company hopes to restructure its finances under court supervision while addressing the mounting litigation related to its use of ethylene oxide.