NECC Bankruptcy Plan Could Come in Two Weeks

By Walter F. Roche Jr.

A proposed bankruptcy plan which could provide millions of dollars in relief to victims of a nationwide fungal meningitis outbreak could be filed within the next two weeks, according to the attorney for the bankruptcy trustee.
"We are very, very close," Michael Gottfried, the attorney representing trustee Paul D. Moore, told U.S. District Judge Rya Zobel in an hour long court session Thursday in Boston.
He added that the plan could be filed in early November, which would be a little over two years after the fatal outbreak became public.
Previously Moore disclosed that an agreement had been reached with some of the defendants and insurance companies on a plan that would provide over $100 million for victims and creditors.
Gottfried did not provide any additional information on a settlement plan Thursday.
Zobel is presiding over hundreds of civil cases stemming from the outbreak which killed 64 patients and sickened 751.
The bankruptcy case of the New England Compounding is pending before a separate judge, but the plan will be the source of funds for the victims and other creditors seeking compensation. State and federal regulators have concluded that NECC caused the outbreak by shipping fungus tainted steroids to health facilities across the country.
Also appearing at the afternoon session were attorneys for Tennessee victims of the outbreak and the Saint Thomas Outpatient Neurosurgical Center and two other Tennessee facilities where patients were injected with spinal steroids supplied by NECC.
Gerard Stranch, representing Tennessee victims, told Zobel that a major dispute has been developing over the scheduling of depositions in which key figures will be questioned under oath. He said he will likely be asking the court's assistance in resolving the matter.
Stranch said another issue that will have to be resolved is whether the Saint Thomas parties must disclose details of one of their agreements with insurance carriers. Lawyers for the Nashville facility contend the information does not have to be provided.
Zobel also heard arguments over whether equipment and other materials from NECC must be preserved for possible use in the cases. Zobel did not rule on that matter.
The bankruptcy trustee had argued that the cost of maintaining the items, such as a 10 foot long bench, was too burdensome.
Lawyers for Saint Thomas, which wants some items preserved, stated that they were working on an agreement that would not draw on the assets in the bankruptcy case.
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