PHILADELPHIA, May 20, 2015 /PRNewswire/ -- Judge Henry J. Boroff of the United States Bankruptcy Court for the District of Massachusetts said yesterday he would approve the Chapter 11 Plan of New England Compounding Center ("NECC"), the compounding pharmacy involved in a deadly national meningitis outbreak. Under the confirmed Plan, approximately $200 million will be available to compensate NECC's creditors, including victims who became ill or died as the result of receiving an injection of the tainted steroid. Over 98% of creditors that voted on the Plan voted to accept the Plan.
The NECC Chapter 11 Plan establishes a Tort Trust for compensating those persons that have suffered personal injury and/or death due to allegedly contaminated drugs compounded by NECC.
The Tort Trust will be funded by the proceeds of settlements with NECC's shareholders, various clinics and health care providers that administered NECC drugs, and companies that had business relationships with NECC. Those parties will receive releases from NECC-related liability, as well as injunctions in aid thereof, in exchange for their substantial contributions. The Trustee and the Official Creditors Committee anticipate that distributions to victims from the Tort Trust may commence before the end of the year.
Harry Roth and Michael Coren of Cohen, Placitella and Roth, co-chairs of the Official Creditors Committee in the bankruptcy, said following the hearing on Plan approval held in Springfield Massachusetts:
"We are pleased that Judge Boroff will approve the Plan. At the outset of this litigation there was grave concern given the available insurance and assets of the company that there would never be adequate compensation for the victims of the largest ever doctor induced infection outbreak in the nation. The NECC Chapter 11 Plan is the culmination of the efforts of a large legal team drawn from law firms across the country. These lawyers since the fall of 2012 have dedicated themselves and a great deal of their time towards creating a compensation fund and equitable distribution program for the NECC victims. Now with the court's approval of the Plan we feel we have accomplished these goals."
The Centers for Disease Control estimates that at least 751 people nation-wide have been diagnosed with fungal meningitis or other serious injuries as a result of the administration of NECC products. At least 64 deaths have been confirmed. Maryland, Michigan, New Jersey, Indiana, Tennessee and Virginia were the states effected the most, and patients or their surviving family members have brought over 600 law suits following the fungal infection outbreak traced back to medications compounded and dispensed by NECC. The suits are all pending in the United States District Court for the District of Massachusetts in Boston.
SOURCE Cohen, Placitella & Roth, P.C.