Wednesday, May 13, 2015

NECC Trustee Urges Approval of Bankruptcy Plan

By Walter F. Roche Jr.

Citing the overwhelming support of victims and other creditors, the trustee for the drug compounding firm blamed for a deadly 2012 fungal meningitis outbreak is urging a judge to finally approve a $200 million liquidation plan.
In an 18-page brief filed in U.S. Bankruptcy Court, trustee Paul D. Moore is urging U.S. Bankruptcy Judge Henry Boroff to reject the lone objection to the plan to liquidate the assets of the New England Compounding Center.
The sole objection was filed by the U.S. Trustee who had questioned the fact that not all parties who would get releases from further liability were actually contributing to the $200 million fund. U.S. Trustee Edward K. Harrington also had questioned why the plan did not include an opt out provision for those objecting to the proposal.
Moore, however, noted that the overwhelming majority of those eligible to vote on the plan had voted in favor.
Of the 3,558 eligible to vote, 2,673 submitted ballots by the May 5 deadline. Of those, some 98 percent voted in favor including 99.04 percent of the victims of the outbreak.
The 2012 fungal meningitis outbreak sickened 778 patients across the country, 76 of whom died. Most of the $200 to $220 million is expected to go to those victims or their survivors.
"This is an unqualified, and indeed remarkable demonstration of creditors' support," Moore's brief stated.
The  plan will be the subject of a May 19 hearing before Boroff.
A second objection to the plan had been filed in behalf of the mother of a 3-year-old Nevada boy who died following heart surgery during which he was treated with a drug produced by NECC. That objection charged that technical details set out in the plan would preclude the claim.
That objection was subsequently withdrawn.
Moore's brief cited prior cases that won approval and contained elements similar to those objected to by Harrington.
As for the releases to parties not contributing to the $200 million pot, Moore said that those releases were "essential components" in winning the support of all those who are contributing.

No comments:

Post a Comment