Judge Defers Action on Disputed Meningitis Fee Request

By Walter F. Roche Jr.

After nearly two hours of arguments, a federal judge has deferred action on a disputed $3.75 million fee request in the bankruptcy of the firm blamed for a nationwide outbreak of fungal meningitis.
U.S. Bankruptcy Judge Henry J. Boroff said he would take the pay issue under advisement in the fee requested by Paul D. Moore for his work in the bankruptcy of the New England Compounding Center.
Moore originally requested a fee of $5.758 million but later reduced it to $3.7 million under an agreement with the U.S. Trustee. Thomas Sobol, representing victims of the outbreak, argued Tuesday that it should be reduced further to $1.3 million
"This case is one in which there has to be some sacrifice," Sobol said. "It is not the case for an enhancement."
Stating that he has "an enormous amount of respect for Mr. Moore," he added, "The victims should not be paying an enhancement."
Moore's attorney, Michael Lastowski, referred to the case as a "resounding success," and gave a detailed history of the litigation from the time the bankruptcy was filed on Dec. 21, 2012.
Stating that "prospects looked bleak" for any substantial recovery, he said at the onset even basic information was scant.
He said the case was "very sophisticated" and Moore achieved an extraordinary result. He also noted that some 8 per cent of the total recovered could go to plaintiff and other creditors' lawyers who took lead roles in the case.
Sobol, however, said the comparison with the so-called common benefit fund was not fair as it would be shared by some two dozen lawyers.
"No one will be paid more than their lodestar," he said referring to a method of computing a lawyer's individual fee.
Earlier in the session Boroff did approve several other fee requests, including two which were adjusted downward slightly.
Among those approved was a fee of some $4.3 million for Duane Morris, Moore's law firm.
Sobol noted that that amount included $1.2  million for work done by Moore.
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Drug Compounder Licensed in Tennessee and Indiana Cited by FDA

 A California drug compounding pharmacy has been cited by the U.S. Food and Drug Administration for unsanitary conditions in a facility producing sterile drugs.
Cited by the FDA today was Park Compounding, also known as Chen Shwezin located in California. Records show Park Compounding is currently licensed in Tennessee and Indiana.
The FDA notice called on health care providers to halt the use of any unused sterile drugs shipped by the firm.
According to the FDA, Park Compounding agreed to halt the production of sterile drugs but refused to order a recall of its shipped products.
The FDA reported finding poor sterile production practices at the company facilities. The agency reported that it has not received any notices of adverse effects by patients treated with sterile drugs from the company.
The report from an FDA inspection completed in September cited a lack of pest control, brownish staining on floors, walls and other surfaces, peeling paint and failure to conduct required environmental monitoring.
FDA records show Park did recall a lot of testosterone in 2013 after questions were raised about the validity of its sterilization testing.

Drug Products Intended to be Sterile by Chen Shwezin Inc., dba Park Compounding Pharmacy: FDA Statement - Lack of Sterility Assurance

AUDIENCE: Pharmacy, Compounding, Nursing, Risk Manager
ISSUE: During FDA’s recent inspection of Park Compounding Pharmacy’s facility, FDA investigators observed insanitary conditions, including poor sterile production practices, which raise concerns about the company’s ability to assure the sterility of drug products that it produced. The FDA is alerting health care professionals and patients not to use drug products intended to be sterile made and distributed by Chen Shwezin Inc., doing business as Park Compounding Pharmacy, in Westlake Village, Calif.
BACKGROUND: On September 29, 2015, FDA recommended that Park Compounding Pharmacy cease sterile operations until adequate corrections are made at its facility, and recall all of its non-expired sterile drug products. On September 30, 2015, Park Compounding Pharmacy informed FDA that it has agreed to cease sterile operations, but the company has refused to recall its products.
To date, FDA is not aware of any adverse events associated with the use of products from Park Compounding Pharmacy. Patients who have received drug products produced by Park Compounding Pharmacy and have concerns should contact their health care professional.
RECOMMENDATION: Health care professionals should immediately check their medical supplies, quarantine any sterile drug products from Park Compounding Pharmacy, and not administer them to patients.
Healthcare professionals and patients are encouraged to report adverse events or side effects related to the use of these products to the FDA's MedWatch Safety Information and Adverse Event Reporting Program:

• Complete and submit the report Online: www.fda.gov/MedWatch/report
• Download form or call 1-800-332-1088 to request a reporting form, then complete and return to the address on the pre-addressed form, or submit by fax to 1-800-FDA-0178

https://bay179.mail.live.com/?tid=cmFvjQ9ipq5RGfagAjfePtpA2&fid=flinbox

NECC Trustee Defends $3.75 Million Fee Request

By Walter F. Roche Jr.

The attorney who served as trustee of the New England Compounding Center has issued a strongly worded 25-page response to charges that his trimmed down $3.8 million fee request is excessive.
In a response filed Friday in U.S. Bankruptcy Court in Massachusetts, attorneys for Paul D. Moore cited his "extraordinary success" in amassing some $200 million for victims and creditors of the company blamed for a nationwide fungal meningitis outbreak.
The filing comes just prior to a scheduled hearing on legal and other fee requests submitted in the 30-month old case. The session is set for Tuesday at 11 a.m. before U.S. Bankruptcy Judge Henry J. Boroff.
Moore was responding to a motion filed by the plaintiffs' steering committee (PSC), composed of lawyers for victims of the 2012 outbreak that killed 76 patients across the country. The PSC, in a highly critical filing, charged that Moore was seeking excessive compensation that would equate to an hourly fee of $2,162.
Moore disputed that calculation stating that the actual hourly figure was $967.07.
"It defies logic to suggest that a contingent fee of 1.9 percent is unreasonable under the circumstances of this case," the brief states.
Moore's lawyers also disputed the PSC's claim that he was trying to take credit for negotiations that involved several other parties.
Noting that settlement details were confidential, Moore's attorneys focused on his role in negotiating settlements with the NECC shareholders and other insiders.
That agreement, the brief states, was "a critical achievement that created the momentum that led to the other settlements."
Moore also defended requesting separate fees for his role as trustee and a member of the legal team from his law firm, Duane Morris, that served as counsel in the case. The law firm has requested payments of $4.3 million.
"Snide suggestions of impropriety are wholly unsupported," Moore's lawyers wrote.
They also noted that Moore, under an agreement with the U.S. Trustee, reduced his original fee request from $5.75 million to $3.75 million. The PSC has asked that his fee be cut further to $1.43 million.
 Moore's attorneys also pointed to much higher legal fees that could be paid from a fund set aside from the total settlement to pay plaintiff lawyers who played lead roles in the case. That common fund fee, they noted, could, if approved, total 8 percent of the anticipated $200 million with billing for some 31,000 hours.
The (Moore) request, the filing states, "will not result in a windfall. Instead he (Moore) is seeking a reasonable commission."
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Deadline Looms For Meningitis Outbreak Victims

By Walter F. Roche Jr.












Victims of the 2012 fungal meningitis outbreak have only till Friday to submit detailed data to back up their claims to some $200 million in a trust fund amassed in a lengthy bankruptcy case.
The deadline, which was set by U.S. Bankruptcy Judge Henry J. Boroff, requires those claims to actually be in the hands of court officials by the Friday deadline.
The claimants are victims of the 2012 fungal meningitis outbreak which sickened 778 patients across the country, killing 76 of them. Some $50 million in the trust fund money came from the owners of the defunct New England Compounding Center, the Massachusetts firm blamed by regulators for the outbreak.
Several attorneys representing victims of the outbreak who were contacted this week reported that all the paperwork for their clients had been submitted.
But some of the victims also have filed for extensions on the Friday deadline. They include a North Carolina woman, Carolyn Wilson, who doesn't have an attorney.
She, like several other so-called pro-se claimants, have been getting an assist from two Boston University Law School students, who were recruited for the task by one of their professors, Kevin Outterson.
Lewis Osterman, who has just begun his second year at the law school, said he and a colleague, Kristen Rogerson, spent the summer assisting some two dozen victims in putting together the needed paperwork.
Among the items required, he noted, are medical records showing that the victim does indeed fall into one of the authorized categories.
Under a plan approved by the court, victims will be awarded points based upon a variety of factors including the severity of the illness they suffered after being injected with fungus infused steroids shipped from NECC.
Osterman said most of the victims he assisted were in "Category Six." Victims in that category were injected with the tainted steroid but did not suffer spinal meningitis. They did, however, suffer some ill effects such as headaches and dizziness.
He said a smaller number fell into "Category 7." Those victims did get injected with the fungus laden steroid but had no ill effects.
Osterman said that while he knows what category the victims he assisted fall into, he doesn't know how much, if anything, they will get from the trust fund.
"No one knows," he said. "It's really hard to say."
Osterman, a Colorado resident, said the victim from North Carolina also needed assistance signing a waiver under the federal Health Insurance Portability and Accountability Act, known as HIPAA.
He said that while the forms and process were quite complicated, many of those victims he dealt with, had done everything correctly.
"They just needed a reassurance that everything was okay," he said.
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Recall of Sterile Compounded Drugs

Recall -- Firm Press Release

FDA posts press releases and other notices of recalls and market withdrawals from the firms involved as a service to consumers, the media, and other interested parties. FDA does not endorse either the product or the company.

 

US Compounding, Inc. Issues Voluntary Nationwide Recall of All Sterile Compounded Products

Contact:
Consumer:
800-718-3588 x254
501-327-1222 x254
FOR IMMEDIATE RELEASE – September 21, 2015 – Conway, AK – US Compounding, Inc. ("USC") is voluntarily recalling all lots of sterile products aseptically compounded and packaged by USC and that remain within expiry due to the Food and Drug Administration's ("FDA")_ concern over a lack of sterility assurance. The sterile products were distributed nationwide to patients, providers, hospitals, or clinics between March 14, 2015 and September 9, 2015. The recall does not pertain to any non-sterile compounded medications prepared by USC.
If the sterility of a compounded preparation intended to be sterile is compromised, patients may be at risk. As USC takes the utmost care to ensure patient safety and out of an abundance of caution, then, USC is asking all patients and providers that received sterile compounded products from USC between March 14, 2015 and September 9, 2015, and that remain within expiry, to take the following actions:

1. Discontinue use of the products;
2. Quarantine any unused product until further instructions are received on how to return the product; and
3. Contact USC at 800-718-3588 x254 or 501-327-1222 x254 from the hours of 8:30AM-5:00PM central time Monday-Friday, or e-mail at questions@uscompounding.com to discuss the return of any unused sterile compounded products.

Customers with questions regarding this recall can contact USC at 800-718-3588 x254 or 501-327-1222 x254 from the hours of 8:30AM-5:00PM central time Monday-Friday, or e-mail at questions@uscompounding.com. Customers should contact their physician or healthcare provider if they have experienced any problems that may be related to taking or using this drug product. Providers who have dispensed any sterile product distributed by USC to a patient(s) for use outside of the provider's office should contact the patient(s) to whom product was dispensed and advise the patient(s) of this recall.
Adverse reactions or quality problems experienced with the use of these products may be reported to the FDA's MedWatch Adverse Event Reporting program either online, by regular mail or by fax.

• Complete and submit the report Online: www.fda.gov/medwatch/report.htm
• Regular Mail or Fax: Download form www.fda.gov/MedWatch/getforms.htm or call 1-800-332-1088 to request a reporting form, then complete and return to the address on the pre-addressed form, or submit by fax to 1-800-FDA-0178

This recall is being conducted with the knowledge of and at the request of the FDA.
Again, USC's primary concern is your safety and USC is taking this action out of an abundance of caution. Thank you for your support.
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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.
Contact:wfrochejr999@gmail.com

NECC Trustee Chops Fee Request Amid Protests

By Walter F. Roche Jr.

The trustee who oversaw the bankruptcy of the New England Compounding Center has agreed to a $2 million or 34.8 percent cut in his requested fees, even as creditors in the case are calling his original request excessive and unreasonable.
Filings in U.S. Bankruptcy Court in Massachusetts show Paul D. Moore, who served as NECC's trustee, reached an agreement with U.S. Trustee William K. Harrington to reduce his fees in the three-year-old case from $5.75 million to $3.75 million.
According to the filing the reduced fee for Moore and smaller reductions by other parties seeking payments was the result of recently completed negotiations.
On the same day that agreement was announced, creditors in the case filed an objection to Moore's original fee request charging that it, if approved, would amount to an hourly payment of $3,320, compared to Moore's normal hourly fee of a little over $600.
"This is excessive," the creditor's attorney William Baldiga wrote in the objection, adding that it would amount to "a windfall."
Conceding that Moore's work on the bankruptcy was "important and beneficial," Baldiga added, " he (Moore) was by no means the only party to drive the result. Trustee is seeking the maximum possible commission for himself."
In addition to his own fee request, Moore's law firm, Duane Morris, has asked for just under $4.3 million in fees and $63,601.10 in expenses. No reduction in those amounts have been offered.
In the filing by Moore and the U.S. Trustee, they also disclosed an agreement to cut payments by a little over $10,000 requested by two other firms involved in the case.
William Baldiga, the attorney for the creditors, did not respond to a request for comment on Moore's fee reduction.
The Moore fee cut agreement is not the first to be disclosed. Previously a Florida attorney disclosed he had agreed to cut his fee request by nearly $1 million.
Prior to those reductions, fee requests in the case totaled some $17 million.
Payments of the claims, if approved by Boroff, will come from a $200 million trust fund created under the NECC liquidation plan. Victims will be paid from the remaining funds after the expenses are paid.
NECC has been blamed for the 2012 fungal meningitis outbreak that killed 76 patients across the country. An additional 702 patients were sickened.
The fees are scheduled to be argued in November before U.S. Judge Henry J. Boroff.
Contact: wfrochejr999@gmail.com