NECC Liquidation Plan Gets Formal Approval

By Walter F. Roche Jr.


As promised a federal bankruptcy judge has given his formal approval to a plan that will provide million of dollars to victims of a 2012 fungal meningitis outbreak that sickened 778 patients, killing 76 of them.
U.S. Judge Henry J. Boroff signed off on the massive plan Wednesday, a day after he promised to do so during a hearing in Springfield, Mass.
The plan will set out the process to distribute funds from the owners of the New England Compounding Center, the firm blamed for the deadly outbreak, affiliated companies, insurance companies and firms that provided services to the defunct Framingham, Mass. drug compounder
Paul D. Moore, the court appointed trustee for NECC, said Wednesday that he remains hopeful funds will be distributed to victims by the end of the current year.
He said distribution of the funds included in the plan will not be dependent on the outcome of separate pending litigation against health care facilities where patients were injected with fungus tainted steroids from NECC.
"Remaining litigation has nothing whatsoever to do with plan distributions," Moore wrote in an email. "Our hope and expectation is, as reported, that distributions will be made, or at least commenced with respect to undisputed claims by year end. These people have waited a long time for some relief."
Under the plan approved by Boroff about $160 million will go into a so-called national fund to be distributed to victims nationwide.
An additional $59.5 million will be available only for those victims who were treated at facilities that agreed to a mediated settlement. The largest amount, some $40 million, will go to victims treated at Insight Imaging in Virginia, while $3.5 million is earmarked for victims treated at a North Carolina clinic and $16 million for those treated at a New Jersey health facility.
Victims who were treated at facilities not participating in the mediation program, including the Saint Thomas Outpatient Neurosurgical Center in Nashville, could first get an award from the $160 million national fund and, then if successful, get a second award from separate pending litigation.
"They will receive their distribution share from the bankruptcy court and then those who filed individual cases will continue to litigate against the clinics," said Nashville attorney Gerard Stranch, who represents Tennessee victims.

That remaining litigation includes dozens of civil suits that have been merged before another federal judge, Rya Zobel, who has scheduled a May 28 status conference on the suits.
wfrochejr999@gmail.com