Wednesday, December 3, 2014

$135 Million Plan filed in Fungal Meningitis Bankruptcy

By Walter F. Roche Jr.

The trustee in the bankruptcy of the firm blamed for a nationwide fungal meningitis outbreak has filed a liquidation plan that would provide at least $135 million, with most of that amount earmarked for victims and their survivors.
The massive plan was filed late Wednesday in U.S. Bankruptcy Court in Massachusetts. The agreement is subject to court and creditor approval. The settlement plan includes previously disclosed contributions of $47.75 million from the owners of the now defunct New England Compounding Center.
The 2012 outbreak sickened 751 persons taking the lives of 64, many from Michigan, Tennessee, Virginia and New Jersey.
The settlement total jumped by some $35 million since preliminary details were revealed to U.S. Bankruptcy Judge Henry Boroff earlier this year. The new contributions include payments from two major providers and their insurance companies plus settlements with a testing company hired by NECC, a contractor used by the compounding firm and agreements with a sister drug firm and its insurance carrier.
There was no settlement, however, with the Saint Thomas Outpatient Neurosurgical Center, the Nashville site where most of the Tennessee victims were injected with fungus tainted methylprednisolone acetate.
According to the filings some 3,500 claims filed in the case were for death or illness caused by the outbreak.
In a statement announcing the details, Paul D. Moore, the trustee, said the plan was the result of "substantial efforts."
Anne Andrews, a California representing victims said the settlement should give victims "a sense of closure," while Thomas Sobol, another plaintiff lawyer from Boston, said the settlement "should provide much needed compensation."
"It is encouraging that some wrongdoers have stepped up and are accepting responsibility for the harm they have caused," said Mark Chalos, a Nashville  attorney for several outbreak victims, adding that they were committed "to fighting for our clients to make sure all wrongdoers are held accountable."
The plan also includes current and anticipated expenses including legal fees and expenses totaling $3.4 million from  Moore's law firm and that number is expected to climb by another $2 million.
Additional funds could be available if NECC's sister firm, Ameridose, can be sold.
The settlements include $10 million from Ameridose and its insurance carrier, $3.75 million from NECC's landlord, $25.2 million from insurance companies, $16 million from the Inspira Health Network in New Jersey and $6.4 million from ARL Biopharma, a testing firm. Many of those settlements include contributions from the respective insurance carriers.
Under an agreement with Tennessee's Board of Pharmacy, Tennessee  could recoup up to $5 million for the costs it incurred in investigating the outbreak.

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