3rd Distribution Possible for Outbreak Victims

By Walter F. Roche Jr.

Although most victims of a deadly 2012 fungal meningitis outbreak are still awaiting a first check, a court filing this week indicates  a third check may be forthcoming eventually.
In an 11-page report filed this week in U.S. District Court in Boston, Mass., lawyers for victims said a third payment could result if the former owners of a defunct drug compounding firm succeed in getting tax refunds.
The refunds would go to the former owners of the New England Compounding Center, the Framingham, Mass. company blamed for the outbreak. NECC shipped fungus laden steroids to health providers across the country.  The outbreak sickened 778 patients. Seventy-seven of them have died.
NECC's owners have agreed as part of a bankruptcy settlement to transfer any tax refunds to a trust fund set up to benefit victims and their survivors.
"There remains a possibility under the bankruptcy plan that the principles of NECC will receive tax refunds related to their payment into the NECC bankruptcy plan," the report from attorney Kristen Johnson states, adding that those refunds would then be passed along to victims in a third distribution.
Johnson also reported that victims should be receiving a second check sometime this summer.
Johnson, who serves on a committee representing plaintiffs in the ongoing litigation, also reported that a request for some $6 million in attorney fees will be submitted for court approval. That represents the second half of some $12 million in so-called common benefit fees for attorneys who handled key aspects of the litigation. The first payment was made late last year.
She said the second payment would not be issued until more than half of the victims have received a second check.
In a separate report filed this week, the trustee of the victims' fund reported that thus far more than 2,000 checks have been issued to victims totaling $81.9 million
The filings come in a once massive case before U.S. District Senior Judge Rya Zobel. Claims by victims from across the country were merged in her court.
According to Johnson's report, however, dozens of those suits have been resolved, while others have been sent back to state courts. Most of the suits were filed against the clinics or other health care providers who injected patients with fungus laden steroids from NECC.
According to her report, claims by victims against clinics in Michigan and Virginia have been settled or dismissed.
Claims against one New Jersey clinic have been sent back to state courts for resolution, while claims against a second New Jersey clinic have been settled.
Zobel may still have to preside over cases against clinics in Maryland and Tennessee. However, suits against a Nashville Tenn. facility have been settled.
Johnson reported that within 30 days attorneys in the Nashville cases will be submitting a request for fees that will also come out of the settlement. The amount of that settlement has not been made public.
"The Plaintiffs Steering Committee hopes this will not be a contested motion," the report states.
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