Robin Amato, Paule Pachter and Themis Kangadis

New York-based olive oil and Mediterranean specialty foods producer Kangadis Foods, Inc. has filed for chapter 11 bankruptcy in the United States Bankruptcy Court for the Eastern District of New York.

The company, which sells its olive oils under brand names that include Gourmet Factory, Capatriti and Porto, made headlines last February when the North American Olive Oil Association (NAOOA) filed a lawsuit claiming “unlawful, misleading and deceptive misbranding.”

Though the company reached a confidential settlement agreement with the NAOOA in July 2013 and never admitted liability for the mislabeling claims, the ensuing legal fees have forced it to declare bankruptcy, according to a press release. Under chapter 11 bankruptcy, the company is allowed to continue normal operations while it develops a reorganization plan.

“This is always a regrettable step,” said Themis Kangadis, CEO of Kangadis Food.

“We are a family business with excellent customer relationships, a highly regarded product line, dedicated, hard-working employees and a solid track record with suppliers, business partners, and our local community. Nevertheless, we find it necessary to seek this protection while we continue to vigorously fight a potentially open-ended class action which we believe has no merit.”

The NAOOA had accused Kangadis Foods, Inc. of selling roughly one million tins a year of olive pomace oil, a refined product derived from olive oil byproducts, with the label “100% Pure Olive Oil.” The organization began to suspect foul play when Capatriti brand olive oils began appearing on retail shelves at one-third to one-half the price of similar products. Kangadis Foods consistently denied such claims.

“Our products meet all applicable regulatory standards of the FDA, USDA and International Olive Oil Council, and are randomly tested for quality several times throughout the year,” Kangadis said.

“We stand by our products and we intend to emerge from this process as an even more competitive enterprise.”

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