Further Cuts Sought In NECC's Trustee Fees

By Walter F. Roche Jr.

The trustee in the New England Compounding Pharmacy bankruptcy case is not entitled to a $2.5 million commission and his total payments should be reduced to $1.43 million, according to attorneys for the victims of a 2012 fungal meningitis outbreak.
In a 37-page filing in U.S. Bankruptcy Court in Massachusetts, the outbreak victims lawyers said the trustee, Paul D. Moore, "is not entitled to, and the law does not provide" for such a commission.
The filing is the latest development in the bankruptcy of NECC, the firm blamed for the 2012 fungal meningitis outbreak, which sickened 778 patients across the country, killing 76 of them.
The request for a further reduction in Moore's requested fee follows the filing of an agreement between Moore and the U.S. Trustee reducing his originally requested fee by $2 million to $3.75 million.
But the victims' lawyers argued that the cut did not go far enough and the fee should be cut by another $2.32 million.
"While Mr. Moore's work has been exemplary, this is not the case to make new law and further reduce the already insufficient amounts available to NECC's victims," attorney Thomas Sobol wrote in the motion.
According to the brief, Moore's payment rate under the proposed compromise would compute to $2,162 an hour.
Sobol and his colleagues also noted that $4.3 million in additional payments have been requested by Moore's law firm, Duane Morris. The firm's billing includes $1.43 million for work done by Moore himself.
Even if his fee were reduced to the requested level, the filing states,  Moore and his law firm would get a total of $5.733 million "and will be among the highest paid attorneys and firms representing victims' interest in the NECC litigation."
Backing the claim for a further reduction, the filing cites numerous other cases in which the courts in the First Circuit have turned back bonus or commission payment requests.
"The trustee did an admirable job to maximize the benefit to NECC's victims," the filing states, adding that Moore "kept a vigilant eye on costs.
But, Sobol noted, other attorneys were involved in the effort to amass a total of a little over $210 million to pay victims and creditors.
"The settlements were accomplished by multiple players devoting thousands of hours of work, not by Mr. Moore alone," the filing states.
U.S. Bankruptcy Judge Henry J. Boroff, the presiding judge in the case, has set an Oct. 30 deadline for further objections to a total of $15 million in legal and other expenses pending before the court. A hearing on the fee requests has been set for Nov. 10 in federal court in Worcester, Mass.
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