Thursday, April 30, 2015

Virtually All Meningitis Victims Support Bankruptcy Plan

By Walter F. Roche Jr.

A total of 99.5 percent of the victims of the national 2012 fungal meningitis outbreak have voted in favor of a $220 million plan to liquidate the assets of the company blamed for the public health debacle.
Documents filed Thursday in U.S. District Court in Massachusetts show that only 0.45 percent of the patients who filed claims against the New England Compounding Center have voted to reject the plan prepared by bankruptcy trustee Paul D. Moore.
In the filing Moore disclosed that thus far 1,749 of the victims or their survivors favor the plan that would provide more than $200 million to victims of the outbreak.
Similar lopsided favorable votes were reported in other categories of creditors in the bankruptcy. Overall 1,773 or 98.83 percent voted in favor of the liquidation plan, while 21 creditors voted to reject the proposal.
The filing comes just one day after a 90 minute hearing before the federal judge presiding over the hundreds of civil cases filed by  victims of the outbreak.
At the hearing U.S. District Judge Rya Zobel was told that the overwhelming majority of the voters supported the $220 million plan.
According to the latest figures 778 patients were sickened and 76 of them died after being injected with fungus laden methyhlprednisolone acetate shipped by NECC to health providers across the country.
At the hearing Wednesday an attorney for victims noted that those making claims against NECC, including victims, must file their ballots so that they arrive by  4 p.m. May 5 at the offices of Donlin Recano, the firm hired to oversee the voting.
U.S Bankruptcy Judge Henry J. Boroff has scheduled a May 19 hearing on the bankruptcy plan.
The $220 million includes payments from insurance companies, the owners of NECC, related companies and some of the health facilities where patients were injected with the fungus tainted steroid.
Some of that total will be earmarked only for those victims injected at facilities that have reached a settlement.

Wednesday, April 29, 2015

Conflict of Interest Charged in Meningitis Cases

By Walter F. Roche Jr.

The proposed appointment of a trustee in the settlement of cases stemming from a nationwide fungal meningitis outbreak poses both a real and perceived conflict of interest, an attorney for victims charged Wednesday.
Thomas Sobel, representing the plaintiffs steering committee, told U.S. Judge Rya Zobel members of his panel voted unanimously to oppose the appointment of David Molton to a trustee post overseeing the distribution of some $200 million in settlement funds.
Sobel charged that the hiring of Molton, as proposed by creditors of the New England Compounding Center, not only presented a conflict of interest but could result in excessive legal fees which would reduce funds available to victims of the 2012 outbreak.
He said the proposal called for Molton to hire his own law firm, Brown Rudnick, at the rate of $625 an hour to handle legal matters for the trustee.
The charges are the latest development in a long legal battle stemming from the meningitis outbreak which took the lives of 76 patients and sickened 778 across the country. Zobel is presiding over dozens of cases filed by victims of the outbreak or their survivors.
At the Wednesday hearing lawyers also clashed over the timetable for bringing the cases to an actual trial.
Attorneys for Saint Thomas Hospital in Nashville told Zobel that bringing a case or cases to trial before the end of the year was impossible and further time was needed for the discovery of evidence.
"We've got to get some discovery, " said Marcy Greer, the Saint Thomas attorney, adding that she didn't want to "rush to trial."
"We just want to make sure it is fair," she added.
Zobel, however, disagreed.
"It shouldn't be impossible at all," she said.
Plaintffs' lawyers argued that victims have already been waiting two years to assert their claims. Cited, in particular, was the case of Diane Reed of Nashville, who died in the outbreak leaving her disabled husband without his sole caretaker.
Zobel deferred action on the appointment of a trustee, noting that she had yet to read one of the briefs filed on the issue.
Sobel said the plaintiffs'  committee recommended the appointment of Lynne Riley, also a Boston attorney experienced in bankruptcy cases.
Anne Andrews, the attorney for creditors, said Molton already was familiar with the case and had been following it even before NECC filed for bankruptcy in late 2012/
She said other candidates had been considered but Molton was chosen because he was most qualified and to bring in a new attorney would result in lengthy delays.
In addition to noting Molton already was involved in the case, Sobel said the proposed $625 an hour fee for Brown Rudnick's services represented a 50 percent increase over the amount the firm has charged thus far in the case.

Monday, April 20, 2015

Another Settlement Reached in Meningitis Cases

By Walter F. Roche Jr.

With a voting deadline approaching, the bankruptcy trustee for the firm blamed for a nationwide fungal meningitis outbreak has reached a settlement that will boost, if only slightly, the money available for victims.
In a filing this week in U.S. Bankruptcy Court in Massachusetts Paul D. Moore disclosed a $1 million settlement with the company that designed and built sterile rooms used to produce drugs intended to be injected into patients.
Liberty Industries built the clean rooms for the New England Compounding Center, the company blamed for the fungal meningitis outbreak that sickened 778 patients, killing 76 of them.
Under the agreement Liberty will pay $450,000 into a victims' fund, while its insurance company, Great American E & S, will pay $550,000.
If approved by Bankruptcy Judge Henry Boroff, the $1 million will be added to some $210 million placed in the fund by other parties including the owners of NECC.
In the filing Moore cited the fact that Liberty was a small family owned company with only 24 employees and few assets.
He said the $1 million was a "fair and reasonable" settlement.
The agreement comes as victims and other claimants against NECC are facing a May 5 deadline to cast their votes on whether or not to approve the overall plan submitted by Moore earlier this year.
Moore noted that some 550 claims have been filed against NECC and 100 victims have named Victory as a defendant.
The 2012 outbreak, state and federal regulators have concluded, resulted from the shipment by NECC of thousands of fungus tainted vials of methylprednisolone acetate to health care providers across the country.
Particularly hard hit were patients in Tennessee, Indiana and Michigan.

Wednesday, April 1, 2015

Clinics, Victims Clash Over Trial Dates, Representative Cases

By Walter F. Roche Jr.

Lawyers for Tennessee defendants and victims of the 2012 fungal meningitis outbreak are a year apart on the proposed time to bring key representative cases before a jury to determine any damage awards from Tennessee health facilities,
Filings in the civil cases now pending in U.S. District Court in Boston involving the Tennessee victims of the outbreak show that the timetable proposed  by victims' lawyers begins in late 2015 while the clinics proposal would set a Dec 2016 starting date and carry on to March of 2017.
The filings also show wide disagreement over the representative cases that should be brought to trial first. Some 89 cases name the Saint Thomas clinic as a defendant.
Plaintiffs have proposed a list of six cases involving the Saint Thomas Outpatient Neurosurgical Center, while the clinic's lawyers have picked three but listed six alternates.
The plaintiff's list includes Diane Reed, 56, of Nashville,  Thomas Rybinski, 55, an auto manufacturing employee, also of Nashville and Adam Ziegler, 35, an Iraq war veteran. Rybinski and Reed died in 2012. Ziegler survived.
The Saint Thomas lawyers' list includes Reba Temple, 80, a retired Hickman Health Department employee and Denis Brock, 68, who suffered a stroke but survived the outbreak.
In the court filings Saint Thomas attorney Chris Tardio has charged that the plaintiffs' list is "neither realistic or fair" and sets a series of impossible deadlines. The plaintiffs "want to rocket cases to trial," the brief states.
The victims' filing by attorney Gerard Stranch states that the selected cases are "emblematic of the types of injuries that form the core of this case."
The motion also cites the long delay the victims have had to wait for their cases to be heard.
"Not one victim has had his or her day in court. No jury has heard about, let alone deliberated on the liability of those who contributed to this tragedy," the brief states.
Tardio, the clinic attorney, challenged the proposal by plaintiffs to merge the trials so they would all be heard together. He said that combining the cases would only confuse jurors.
As to the proposed case selection, the clinic brief charges that the list is weighted to include the most compelling.
"This gallery of suffering drawn from the most sympathetic cases is manifestly unfair to the defendants," Tardio wrote.
Defending the proposal to start the representative trials in December of 2016, the filing states that the later date is "actually an ambitious schedule."

Plaintiffs' Proposed Saint Thomas Cases

Diane Reed
Thomas Rybinski
Anna Sullivan
Jane Wray
Basil McElwee
Adam Ziegler

Saint Thomas Proposed Cases

Reba Temple
Denis Brock
Joseph Pellicone