NECC Liquidation Plan Gets Final Adjustment

By Walter F. Roche Jr.


A federal bankruptcy judge today agreed to approve a $200 million liquidation plan for the drug compounding firm blamed for a nationwide outbreak of fungal meningitis which killed dozens and sickened hundreds.
 U.S. Judge Henry J. Boroff agreed to approve a revised plan to be filed by Paul D. Moore the court appointed trustee of the New England Compounding Center, the firm that shipped fungus tainted steroids to healthcare providers across the country.
Only one objection had been filed against Moore's plan, while dozens of interested parties urged its approval. The $200 million to $220 million amassed in the bankruptcy will go to victims, their survivors and a limited number of creditors of NECC.
Moore said that Boroff agreed to approve the plan after a few changes were ironed out during a morning court session in Springfield, Mass.
The 2012 outbreak killed 76 patients while 778 were sickened overall. Especially hard hit were Michigan, Tennessee, Indiana and Virginia.
 Moore said in a prepared statement that his main mission since he was appointed "was to recover as large a sum as possible for the benefit of those who died or suffered serious injuries as a result of this tragic outbreak. "
Also hailing the approval were attorneys for victims and creditors.
Though Moore said he was  especially pleased victims will soon receive compensation, the actual awarding of payments could be months or even a year or more away depending on the outcome of hundreds of pending civil trials
The bankruptcy was filed in December of 2012, just a few months after the outbreak became public.
NECC, based in Framingham, Mass., recalled all of its products in the fall of 2012, but by then it was too late for the victims.
The $200 million will come from the owners of NECC, related companies, insurance companies and firms that performed services for the drug compounding firm.
The outbreak, the largest of its kind in U.S. history, led to new federal laws and also sparked some states to tighten oversight of firms like NECC that produce sterile drugs injected into patients.
The money from the bankruptcy will be distributed to victims after their claims are resolved in a separate set of civil suits now being overseen by U.S. District Judge Rya Zobel.
Under orders approved by Zobel the money will be distributed under a point system based on the severity of the illness suffered by the victim.
A hearing on the civil suits is scheduled for later this month.

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