Bankrupt pharmaceutical giant settles meningitis claims in $100 M accord

Bloomberg reported that the owners of the beleaguered New England Compounding Pharmacy Inc has agreed to settle claims for victims of the deadly meningitis outbreak the drug supplier was reportedly blamed for. The accord is part of the company's Chapter 11 plan, according to a filing by a trustee who is seeking approval of the agreement in the US Bankruptcy Court in Boston. The filing also revealed that NECC is still facing criminal probes that involved company insiders, 322 lawsuits against the pharmacy and 3,300 claims from injury stemming from the outbreak that had killed 64 people.

The Centers for Disease Control and Prevention had pointed to NECC's tainted drugs, which include a steroid administered by spinal injection for the whopping 700 cases and 64 deaths from meningitis. The outbreak reportedly caused NECC to file for bankruptcy protection in December 2012.

In the filing made yesterday, the lawyer for court-appointed trustee Paul Moore, Jeffrey Sternklar, stated, "(The settlement is a) significant step towards funding a Chapter 11 plan that will furnish a mechanism to provide meaningful compensation (for families of those who died and those injured from the allegedly contaminated medications)."

Moore also said in a statement, "The commitment from the outset of the shareholders of NECC and their families to make a substantial contribution to a fund for those who died or suffered significant injuries as a result of the outbreak resulted in an expeditious consensual agreement with them."

Bloomberg said that as soon as NECC's bankruptcy plan gets confirmed, the company's officers in future claims related to the tainted products will be released from liability. The news agency added that NECC's owners are to contribute $47.75 million into the accord and will be turning over around $20 million in tax refunds. The owners will also reportedly give all of their insurance claims they could make, which is estimated at around $29 million in collections. The insiders' sale of their businesses will also bring another $10 million into the plan.

Tags

New England Compounding Pharmacy Inc, US Bankruptcy Court, Centers for Disease Control and Prevention, NECC meningitis outbreak

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.