Fund for Meningitis Outbreak Victims Jumps by $30.5 Million

By Walter F. Roche Jr.

The fund to benefit victims of the 2012 national fungal meningitis outbreak has been boosted by $30.5 million thanks to a last minute settlement with a firm which had a cleaning contract with the drug firm blamed for the outbreak.
The $30.5 million settlement agreement filed this week in U.S. Bankruptcy Court in Massachusetts boosts the total available to victims and creditors of the outbreak to an estimated $165 million.
The payment will come from insurance companies for UniFirst Corp., which had a contract to perform monthly cleaning services for the New England Compounding Center. NECC has been named as the source of thousands of vials of tainted spinal steroids that sickened 778 patients across the country, killing 76 of them.
According to the 48-page filing by Bankruptcy Trustee Paul D. Moore, $4 million will be paid by National Union Fire Insurance and $26.5 million by North American Elite Insurance. Both firms had  agreements with UniFirst.
The $30.5 million will be added to the $135 million previously committed to a trust fund which will be used to pay victims or their survivors along with other creditors of the defunct Framingham, Mass. firm.
Lawyers for victims of the outbreak said the agreement marked a significant step forward.
"The plaintiffs steering committee and others have worked hard to hold the wrongdoers accountable," said Nashville attorney Mark Chalos, calling the settlement "another step toward achieving justice."
Both he and Gerard Stranch, another Nashville lawyer representing victims, vowed to continue to pursue claims against other parties including the Saint Thomas Outpatient Neurosurgical Center,
 where dozens of Tennessee victims were injected with
Tom Sobol, a Boston attorney representing plaintiffs, said the settlement is "another step in the right direction."

The single largest settlement amount, nearly $50 million, comes from the officers and stockholders of NECC, members of the Conigliaro and Cadden families.
Barry Cadden, a founder of NECC, and members of the Conigliaro family have been named in an indictment issued late last year by a federal grand jury. Cadden and Glenn Chin, a supervisory NECC pharmacist, have been charged with 25 counts of second degree murder.
UniFirst, which was named as a defendant in dozens of suits filed by victims, had insisted that it was not at all responsible for the fungus tainted methylprednisolone acetate.
UniFirst did acknowledge that it had a contract to provide monthly cleaning services for the clean rooms where the drug was produced.
In a statement issued over a year ago, a UniFirst spokesman said, "“UniClean was not in any way responsible for NECC’s day-to-day operations, its overall facility cleanliness, or the integrity of the products they produced.”
In subsequent filings with the U.S. Securities and Exchange Commission, including one filed early this year, the company warned its shareholders that it could not predict what effect the lawsuits would have on the company's future.
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