Pet owners hit by the largest dog and cat food recall in North America are a step closer to receiving some compensation.

Menu Foods Income Fund has announced an agreement in principle to settle claims against it arising out of the tainted pet food.

The Streetsville-based company, whose products include many well-known brands, described the settlement as "a comprehensive, cross-border agreement in principle."

However, few details were available, including the number of pet owners affected and how much they might receive.

The company recalled 60 million cans and pouches of wet cat and dog food after authorities said an ingredient imported from China contained poisonous melamine.

The U.S. Food and Drug Administration has estimated the number of pets affected at 1,950 cats and 2,200 dogs.

Menu Foods confirmed the cost of the recall would be $55 million.

Pet owners should not contact the company until the tentative deal has received final approval in the courts, Menu Foods said.

The proposal is to be filed in U.S. District Court in New Jersey on May 1 with a hearing scheduled for May 14.

A similar timetable is expected for Canada's courts.

The agreement comes just over a year after the company began recalling the food after the U.S. Food and Drug Administration found traces of poisonous melamine in an ingredient called wheat gluten imported from China.

The settlement is to be funded by the income trust and its insurer, the company said.

If and when a definitive settlement agreement and claims process have been finalized and approved, the administrator of the settlement fund will notify pet owners of how to make a claim, the company said.

Menu Foods began recalling food on March 16, 2007, after some cats and dogs that had eaten its products died from kidney failure.

The mediated settlement of the so-called "multi-district litigation" covers most of the lawsuits that were filed against the company.

The recall devastated Menu Foods' business last year.

Sales fell 31 per cent to $244.8 million and the company lost $62.1 million for the year 2007.

Finally, Menu Foods Settles...........

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