Friday, January 15, 2016
Additional Trustee's Fee Approved by Bankruptcy Judge
By Walter F. Roche Jr.
A federal bankruptcy judge today approved an additional $1.1 million in fees to the trustee who oversaw the liquidation of the drug company blamed for a fatal 2012 nationwide fungal meningitis outbreak.
In a 26-page decision U.S. Bankruptcy Judge Henry J. Boroff credited trustee Paul D. Moore with achieving the best possible result from the 2012 tragedy blamed on the defunct New England Compounding Center.
Under his decision Moore will collect a total of $2,271,509 million compared to the trimmed down $3.75 million he most recently requested. In his initial request, Moore had sought payment of $5.758 million
In the Friday decision Boroff noted that there was opposition to part of the fee request, but concluded that Moore's overall request was "less than the maximum compensation" allowed by law
In an earlier order Boroff approved payment to Moore of the $1,135,754 base amount that drew no opposition. He also approved in a prior order a $4.3 million payment to Moore's law firm, Duane Morris. Overall Moore and his firm will collect $6.5 million.
Thomas Sobol, who heads a committee representing victims and other creditors, had argued in a hearing late last year that Moore's fee should be limited to that base amount and that under the circumstances of the case, no bonus payment should be allowed.
Sobol said Friday that he was pleased that his arguments had brought about a reduction from Moore's request. He said he would have to confer with other committee members before making further comment.
In his decision Boroff did take pains to credit other parties with helping to contribute to the final liquidation plan which is expected to provide some $200 million to $210 million to victims and a limited number of creditors.
"It is obvious to this court that the efforts in this case truly did require a village," Boroff wrote.
But, he continued Moore's efforts came not only "in uncharted legal waters," but also involved "orchestrating myriad moving parts akin to building a Rube Goldberg machine piecemeal and out of order."
Citing the fact that NECC had only a little over $1 million in cash when the bankruptcy was filed, Boroff wrote, "In short the prospect of any meaningful recovery from NECC for the hundreds of thousands injured was bleak."
Citing the establishment of the trust fund, Boroff concluded that Moore's "work in this case has been exemplary."
The decision included a history of the case and a brief summary of the deadly fungal meningitis outbreak which sickened 778 patients across the country, killing 76 of them.
The trust fund created under the bankruptcy plan included payments from the owners of NECC, affiliated companies, insurance carriers and companies providing services to NECC. Boroff said in his decision that 90 percent of the total will go to victims.
The outbreak has been blamed on thousands of vials of fungus laden methylprednisolone acetate that were shipped by NECC to health providers in more than 20 states.