Votes on Compounding Case to Be Weighted

By Walter F. Roche Jr.

Court documents spelling out a proposed liquidation plan for a bankrupt Massachusetts drug compounding firm show that victims' votes on that proposal will be weighted depending on the severity of their illness during a 2012 nationwide fungal meningitis outbreak.
The voting details were among dozens of documents filed recently in U.S. Bankruptcy Court in Springfield, Mass.
Bankruptcy Judge Henry J. Boroff issued an order Tuesday setting a 4 p.m. May 15 deadline for victims and certain creditors to vote on the liquidation plan submitted by Paul D. Moore, the bankruptcy trustee for the New England Compounding Center.
NECC has been blamed for the 2012 outbreak which sickened 778 people, killing 76 of them. An estimated $210 million will be available to satisfy claims from the victims, their survivors and certain creditors. Some of the proceeds also will go to defray costs of the bankruptcy and attorneys fees.
If the plan is approved, attorneys involved in the case say that money could be distributed later this year.
According to the court documents, the greatest weight, 120 points, will be given to claims filed in behalf of the survivors of victims who died in the outbreak. Eighty points will go to victims who contracted fungal meningitis, suffered a stroke, infection or abscess, while 10 points will go to those who suffered symptoms such as a headache, fever or neck pain.
Claimants who were simply exposed to an NECC product will get two points while claimants who suffered no direct injury but did face loss of consortium will get one point.
The plan also provides a detailed point system for the eventual award of damages. That matrix system also is based on the severity of the illness and includes other factors such as the length and number of hospitalizations, marital and family status and age.
The $215 million, according to the court filings, will be broken up into one national fund of up to $158 million from which all qualified victims will be paid. Smaller funds ranging from $3.5 million to $40 million will be set aside for victims who were injected with NECC steroids at three clinics.
Those three clinics reached settlement agreements as part of the liquidation plan.
The $40 million will be available  for victims treated by the Insight Imaging Centers in Virginia, while the $3.5 million will be set aside for victims treated at the High Point Surgery Center in North Carolina. A total of $16 million is earmarked for victims treated at the Inspira Health Network in New Jersey.
The funds generated from the bankruptcy will go into a trust fund which will be overseen by an administrator who will review the claims of the victims or their survivors.
In addition to the voting deadline, Boroff's order sets a May 5 deadline for interested parties to file specific objections to the plan. He also set a hearing on the plan for May 19 in his Springfield courtroom.
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