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$100M meningitis settlement filed in bankruptcy court

Victims of a fungal meningitis outbreak stemming from contaminated steroid injections will share a $100 million settlement under an agreement filed Tuesday in multidistrict litigation pending in Boston.

The injections packaged by the New England Compounding Center in Framingham, Mass., killed 64 people and injured over 750 people across 20 states.

The settlement filed in U.S. Bankruptcy Court on Tuesday was tentatively reached in December, according to attorneys from Janet, Jenner & Suggs LLC of Baltimore, who serve on the steering committee in the consolidated case against NECC.

“We are pleased that we were able to get some degree of compensation for our clients,” said attorney Robert K. Jenner. “Certainly when a company is in bankruptcy, you are limited to what the available funds are. The clients who have been affected by the tragedy have been devastated. Is this enough money to compensate that? Not even close.”

Patients came down with the rare disease after receiving a steroid injection in their spines. The medication was packaged by NECC, but the steroids were sent across the country, including seven facilities in Maryland. The compounding center issued a recall of the products in October 2012.

Though victims could receive funds next year, it is still to be determined which of the 3,300 claimants will receive portions of the settlement money. Janet, Jenner & Suggs represented 100 of those claimants, 51 of whom are from Maryland.

“It’s been hard fought,” Jenner said. “It’s been difficult because of the bankruptcy. … It is such a tedious and time-consuming process.”

Going forward, victims will be divided into categories of similar injuries — those diagnosed with meningitis, those with symptoms but no diagnoses, etc. And this “enormous project,” Jenner said, will likely take a while.

“It’s not a perfect system,” Jenner said. “You can’t capture every little nuance, regrettably.”

NECC filed for bankruptcy in 2012. The settlement is with NECC, NECC’s owners, related companies, and insurers.

“The trustee in conjunction with the other factions representing the plaintiffs have worked hard since the beginning of this case to formulate a compensation pool for those injured,” said Frederick H. Fern of Harris Beach PLLC in New York, an attorney for the trustee of the bankrupt company. “This is a large step in that direction, with other potential contributors who will add to the pool and now attention will be turned to others who could contribute to the pool.”

Owners of the NECC, Barry Cadden, Lisa Cadden, Carla Conigliaro and Greg Conigliaro, will pay more than $50 million toward the settlement. Other NECC leaders will give about $10 million.

Insurance companies representing NECC, Pharmacists Mutual and Maxum and related company Ameridose will put in $25 million. When Ameridose is sold, its estimated $9 million worth will be used toward settlement funds, as well.

The cases against NECC were consolidated in 2012 as multidistrict litigation.

The litigation against separate companies involved in the contaminated injections, like those involved in cleaning, air filtration and maintenance of the facility, as well as clinics and doctors that gave out the injections, are still going forward.

The case is: In re: New England Compounding Pharmacy Inc. Products Liability Litigation, MDL No. 2419, U.S. Bankruptcy Court, Boston.