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Judge approves LI olive oil producer's Chapter 11 reorganization plan

The Hauppauge headquarters of Kangadis Food Inc., which

The Hauppauge headquarters of Kangadis Food Inc., which is also known as The Gourmet Factory. This Google street photo is from May 2012. Photo Credit: Google

A bankruptcy judge has approved the Chapter 11 reorganization plan of a Hauppauge olive oil packager and distributor, including a $2 million payment to settle a class-action lawsuit that disputed the company's claim of selling "100 percent pure olive oil."

U.S. Bankruptcy Judge Robert E. Grossman in Central Islip Thursday approved the filing by Kangadis Food Inc., which sells olive oils and Mediterranean foods under the Gourmet Factory brand and has continued operating under a June Chapter 11 filing.

The company, founded in 2003, is expected to formally emerge from Chapter 11 protection in January, said Adam Rosen, an attorney at Silverman Acampora LLP, of Jericho, which is representing Kangadis Food in the Chapter 11 case. "It's a global resolution," he said.

The class-action lawsuit, representing olive oil purchasers and filed in U.S. District Court in Manhattan in April 2013, alleges that consumers were overcharged for oils deceptively labeled as "100 percent pure olive oil" when the product actually contained olive pomace, which is chemically processed from olive pits, skins and pulp.

There was no immediate response to a request for comment from Bursor & Fisher, the Manhattan law firm representing the class-action litigants.

"With the lawsuit resolved and a new financing facility from Signature Bank, the company is well positioned to continue to build for the future," chief executive Themistoklis Kangadis said.

A separate lawsuit, filed in February 2013 in U.S. District Court in Manhattan by a trade group, the North American Olive Oil Association, charged Kangadis Food with deceptively marketing as "100 percent pure olive oil" an oil containing pomace. In that case, a judge barred Kangadis from continuing to sell products containing pomace as "100 percent pure olive oil." Kangadis reached a settlement in which it did not admit guilt; terms were not disclosed.

Kangadis Food, founded by Themistoklis Kangadis' parents -- Greek immigrants Aristidis and Andromahi Kangadis -- employs about 50 people. The company sells its products under the Porto, Olio Villa, Zorba, Kivotos and Capatriti brands.

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