NECC Bankruptcy Judge Disallows Dozens of Claims

By Walter F. Roche Jr.

A federal bankruptcy judge Wednesday formally disallowed claims totaling more than $400 million in the case of the Massachusetts firm blamed for a fatal 2012 fungal meningitis outbreak.
In two separate orders U.S. Judge Henry J. Boroff approved the rejection of dozens of claims primarily from health care providers and insurance firms seeking to offset potential claims against themselves.
The disallowances were recommended by Paul D. Moore, who served as trustee for the bankruptcy and current holds the title of post confirmation officer.
Though the rejection of the claims was not unexpected, the judge's action formally removes them. Moore had reported earlier this week that no objections had been filed by a court approved deadline.
A compromise was reached with the Inspira Health Network and its insurance company.
Among the claims denied was a $240 million claim from the Specialty Surgery Center of Crossville, Tenn., one of the facilities where victims of the outbreak were injected with fungus ridden steroids from NECC.
Also rejected was a claim for $25 million from Donald Jones, a physician previously affiliated with that Tennessee clinic.
Other rejected claims include Blue Cross/Blue Shield affiliates in Michigan and Virginia, Neuromuscular and Rehabilitation Associates of Northern Michigan, the Orlando Center for Outpatient Surgery and Cincinnati Pain Management.
Victims of the outbreak and their survivors are still waiting for word on when they may begin receiving payments from a $200 million trust fund amassed by Moore from former owners of NECC, insurance companies and entities providing services to NECC.
The firm filed for bankruptcy on Dec. 21, 2012, about three months after the outbreak became public. NECC drugs have been blamed for sickening 778 patients across the country, killing 76 of them.