Wednesday, August 19, 2015

Objections Filed on New Hampshire Meningitis Claims

By Walter F. Roche Jr.

A key official in the bankruptcy case of the New England Compounding Center has filed multiple objections to last minute claims filed in behalf of patients apparently treated at New Hampshire health facilities.
Paul Moore, the post confirmation officer in the NECC case, has charged that the filings are faulty and strain credibility.
Moore filed objections to requests for extensions for 18 patients to file claims despite the fact that the deadline passed some 18 months ago. All were filed by the same attorney.
According to Moore's filing the claims failed to include required information on the time and place the victims were alleged to have been injected with fungus tainted methylprednisolone acetate from NECC's Framingham, Mass. facilities.
"None of these motions is supported by a declaration or affidavit," Moore's motion states.
The objections are the latest development in the bankruptcy of the firm blamed for a 2012 fatal outbreak of fungal meningitis. The outbreak sickened 778 patients, killing 76 of them.
More than $200 million is expected to be available for victims of the outbreak, their survivors and a handful of other creditors.
Moore charged that some of the extension requests were "nonsensical" because claims on behalf of those victims already had been filed.
He also noted that the numbers of victims claimed to have suffered joint infections from the NECC drugs exceeded by nine times the total  number of victims in New Hampshire in that category as compiled by the U.S. Centers for Disease Control and Prevention. The CDC count listed a total of 14 New Hampshire victims.

Wednesday, August 12, 2015

Sept. 30 Hearing Set for Meningitis Fee Requests

By Walter F. Roche Jr.

A Sept. 30 date has been set for a hearing on fees and expenses totaling some $17 million in the bankruptcy case of the New England Compounding Center, a defunct Massachusetts drug compounding firm.
Filings today in U.S. Bankruptcy Court set the hearing for 2 p.m. on Sept 30 before U.S. Bankruptcy Judge Henry Boroff at the federal court building in Springfield, Mass.
The pending fee requests include more than $10 million by the trustee who oversaw the bankruptcy proceedings and his law firm.
In the most recent request, the firm of Verdolino and Lowey, is seeking $128,177 in fees and $1,323.77 in expenses. The firm, which charged hourly rates averaging $276.36 but ranging up to $415, provided financial and accounting services.
NECC, which filed for bankruptcy in late 2013, has been blamed for a nationwide outbreak of fungal meningitis which sickened 778 patients, killing 76 of them.
Moore has been credited with amassing more than $200 million from the owners of NECC, related firms, insurance carriers and service providers for NECC. Most of that total will go to victims or their survivors, but legal and other fees of the bankruptcy will be paid first.
Moore has expressed hope that victims will begin collecting payments before the end of the calendar year. Some victims may later get additional payments from pending suits against other parties, including treatment  centers where they were injected with fungus tainted steroids from NECC.
A federal grand jury has indicted 14 owners and employees of NECC following a lengthy criminal probe of the outbreak. Criminal trials are set to begin in April 2016.

Wednesday, August 5, 2015

Lawyers Clash Over Site for Meningitis Suits

By Walter F. Roche Jr.

The attorney for  Saint Thomas Health told a federal judge Wednesday that she has no choice but to send dozens of suits stemming from the deadly fungal meningitis outbreak back to Nashville for trials.
Marcy Greer, the attorney representing Saint Thomas, told U.S. District Judge Rya W. Zobel that federal law mandates that the cases filed for the 2012 outbreak victims be tried in Tennessee.
Nashville attorney George Nolan, however,  said Zobel does have the authority to decide the appropriate venue and that should be U.S. District Court in Boston.
The opposing arguments on the proper place for trials filled most of a 75 minute Wednesday hearing in Zobel's Boston courtroom.
While acknowledging there was "some tension" between two different statutes, Nolan said the cases should remain in Boston because of the law and the fact that Zobel had already made key rulings in the litigation. Transfers back to Tennessee would further delay cases dating back to 2012, he said.
"It's now been three years since these people were injured," Nolan said.
He noted that the precise legal question of jurisdiction had yet to be ruled on in the federal district where Zobel's court is located.
Greer, joined by Nashville attorney Chris Tardio, however, said that Zobel had no choice because a related Boston bankruptcy case was recently resolved.
"This court has lost jurisdiction," Tardio stated.
Greer said that Zobel lost jurisdiction as soon as the liquidation plan for the New England Compounding Center was approved in bankruptcy court.
"We don't want to retry these cases," Greer said, warning that trying the cases in Boston could result in second trials being ordered in Nashville.
Earlier in the session,  Nashville attorney Ben Gestel charged that action in a separate ongoing case in Nashville could upend decisions already made by Zobel.
In that case an insurance company has asked U.S. District Judge Kevin Sharp to rule that, as a matter of law, victims of the outbreak do not have a right to sue a clinic under Tennessee's product liability statute.
Though the case is focused on suits against a Crossville clinic, a ruling in that case could impact cases against other Tennessee clinics where patients were injected with fungus tainted spinal steroids.
That would include the Saint Thomas Outpatient Neurosurgical Center in Nashville, where most of the Tennessee victims were injected.
The 2012 fungal meningitis outbreak sickened 778 patients at health facilities across the country. Seventy-six of those patients died. State and federal regulators concluded that NECC was the source of the steroids triggering the outbreak.
Fourteen officers, employees and owners of that Framingham company are under indictment as a result of a lengthy grand jury probe. Trials are scheduled to being next Spring.

Tuesday, August 4, 2015

Legal Fees in Meningitis Case Top $17 million

By Walter F. Roche Jr.

Requests for legal fees exceeding $17 million have been submitted in the bankruptcy case of the Massachusetts company blamed for a deadly 2012 fungal meningitis outbreak.
The fee requests, which include a total of $10.5 million for the attorney who served as trustee and his law firm, were submitted this week to the judge who has been presiding over the nearly three-year-old case.
Paul D. Moore, the former trustee, submitted a claim for $5.75 million along with a claim for $416.52 in expenses. His law firm, Duane Morris, filed for fees of just under $4.3 million and expenses of $63,601.10.
In a massive filing explaining the request, Moore said that the hourly rates charged, ranging from $625 to $675 an hour, was at a reduced rate from his normal charges. The filings include hour by hour breakdowns of the duties performed, ranging from reading and analyzing emails to appearances in court.
"At the time of the Chapter 11 Trustee's appointment, the debtors situation was dire," the filing states, adding that even after he developed a strategy "implementation was fraught with peril."
Moore's services as trustee ended recently after Boroff approved his liquidation plan, but he will continue to serve as the attorney overseeing the implementation of the liquidation plan.
Under the liquidation plan developed by Moore and recently approved by U.S. Bankruptcy Judge Henry J. Boroff, over $200 million will be available for victims of the deadly outbreak, but legal and administrative fees will come out of the same pot.
The fungal meningitis outbreak, caused by fungus laden injectable steroids, sickened 778 victims across the country killing 76 of them.
Currently, according to filings this week, some 686 civil cases have been filed by victims or their survivors and are pending before another federal judge.
In addition to Moore's and his law firm's filings, claims have been submitted by other attorneys involved in the bankruptcy and financial consulting firms engaged to craft the liquidation plan.
The law firm of Brown Rudnick, which represented unsecured creditors, filed for $3.4 million in fees and $251,992 in expenses, while lawyers representing the unsecured creditors committee, including victims, are seeking $3 million in fees and expenses.
Mesirow Financial filed a claim for $497,655 and $2,329.80 in expenses while Huron Consulting, which was only recently retained, filed for $7,065 in fees and $105.80 in expenses.
Murtha Cullina LLP, a law firm, filed for $211,124 in fees and $2,416 in expenses. The firm, however, already had been paid a $127,300.06 retainer and is only seeking an additional $86,240.
A New Hampshire lawyer,meanwhile, filed motions in several cases for a waiver to file his claims at a later date.
Still other legal fees are likely to be claimed as civil cases are resolved and attorneys collect their share under existing fee agreements.