Children suffering from kidney stones as a result of drinking melamine-tainted Sanlu-brand milk powder will not be able to receive any compensation from collapsed dairy maker Sanlu Group, the Guangzhou Daily reports.

The announcement came during a court verdict on Saturday after the end of the first trial for the families who were suing the milk company for compensation. The People's Intermediate Court in Shijiazhuang, capital city of north China's Hebei province, where the former milk giant was based, issued the verdict.

It said Sanlu Group's liquidity ratio for common claims stood at zero percent, for which it would be impossible for it to pay compensation, which falls under the category of common claims.

Chinese law stipulates that companies declared bankrupt must first pay their employees' salaries and social security payments, followed by their bank debts. Payments for common claims come last, which means they remain unpaid in some cases because companies do not have enough assets left to cover them.

Peng Jian, an attorney who represents compensation cases, said Sanlu had no disposable assets after it had paid its employees' salaries and bank loans.

The verdict came just three days after two criminals were executed for their roles in producing and selling the toxic baby formula, which killed six children and made more than 300,000 sick nationwide.

(CRIENGLISH.com November 30, 2009)