Bankrupt pharmacy linked to meningitis outbreak wants to redeem insurance policies to pay creditors

Many states want the pharmacy’s license revoked, which would keep it from redeeming the policies

The bankruptcy estate of the pharmacy that allegedly caused a deadly meningitis outbreak in the U.S. last year wants to be able to redeem its insurance policies, worth several million dollars, to pay off debts to its creditors.

The New England Compounding Center (NECC) filed for Chapter 11 bankruptcy in December 2012, after fungal meningitis-tainted steroids that it manufactured were linked to an outbreak that killed 53 people and infected hundreds more. Some of the NECC’s creditors are victims of the outbreak.

The total claims of all the creditors exceed NECC’s assets, which are listed as between $1 million and $10 million. Paul Moore, the trustee for NECC’s estate, wants to be able to redeem the insurance policies as a way of putting a dent in the claims. However, at least 28 states want NECC’s license to be suspended, forfeited or revoked, due to the outbreak, which would prevent the estate from redeeming the policies. Moore is requesting court approval to hire Boston law firm Collora to battle the states on this issue.

Read more at Thomson Reuters.

 

Follow the NECC’s saga on InsideCounsel:

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