New England Compounding Center Reveals
$21 Million Paid to Owners Prior to Bankruptcy Filing

BOSTON, Jan. 22, 2013 -- New England Compounding Center (NECC), the Massachusetts compounding pharmacy at the center of the nation's deadly fungal meningitis outbreak, revealed in bankruptcy court filings late on Friday, January 18 that since December 2011 it had paid more than $21 million to NECC's four primary owners, Barry Cadden, Gregory Conigliaro, Carla Conigliaro and Lisa Conigliaro-Cadden, and other NECC insiders.

Details of these insider transfers can be found in the court filings. See US Bankruptcy Court Case 12-19882, Doc 68, Filed 01/18/13, Document Pages 166 of 208.

Brown Rudnick LLP on Friday was selected to represent the Official Committee of Unsecured Creditors in the bankruptcy of NECC, including the victims who received injections of tainted steroids traced to NECC. The Committee and Brown Rudnick are examining information concerning money transfers to insiders and considering the appropriate legal responses.

A hearing is scheduled for Thursday, January 24 at the U.S. Bankruptcy Court in Springfield, Massachusetts as to whether the Court should order an independent trustee to replace NECC's board of directors.

"NECC has shown a shocking disregard for safety measures that should have been followed in its facility after failing inspection after inspection for years," said William R. Baldiga, a partner at Brown Rudnick representing the Creditor Committee. "The company was operating under unsafe conditions, yet clearly had the funds to ensure its compliance with all appropriate regulations to protect the health and well being of patients to be injected with its products."

"The Committee's statutory duty is to help ensure that the property of the estate is protected, taken under control of the estate and made available to victims and creditors with claims against the company," commented Brown Rudnick partner David Molton, who also represents the Committee. Molton continued, "It is disturbing that significant amounts of company property were taken by insiders during the same period when they were permitting abhorrent conditions at the company that ultimately led to the injury and death of innocents."

"We may still be at the tip of the iceberg in terms of the number of victims who will become ill or die as result of receiving injections of the tainted material," say Anne Andrews of Andrews & Thornton, Irvine, Calif. and Harry Roth of Cohen Placitella & Roth PC, Philadelphia, PA, Co-Chairs of the Official Committee of Unsecured Creditors. "New victims are emerging who instead of coming down with meningitis, have developed fungal abscesses that are almost impossible to treat. Tragically, many individuals have yet to realize they have been sickened with an abscess, and have yet to be diagnosed. The bankruptcy process will help to identify these now silent victims so they too can be treated fairly in this process. The vast medical complications of this tragedy have yet to be fully understood as the number of victims mount."

To date, the outbreak has already killed 44 people and sickened 678, according to the U.S. Centers for Disease Control and Prevention. More than 14,000 people have been exposed to the drugs, which are injected to ease back pain.

The Members of the Official Committee of Unsecured Creditors are:

  • Anne Andrews, Esq. of Andrews & Thornton, representing Katrina Eldreth (co-chair of the Committee)
  • Harry Roth, Esq./Michael Coren, Esq. of Cohen Placitella & Roth PC, representing Meghan A. Handy (co-chair of the Committee)
  • Marc Lipton, Esq. of Lipton Law, representing Brenda Bonsale
  • Tom Sobol, Esq. of Hagens Berman Sobol Shapiro LLP, representing Robert Cole
  • Terry Dawes, Esq. of Fieger Law, representing Victor Davis
  • Melvin Wright, Esq. representing Kathleen Distler
  • Greg Skikos, Esq. of Skikos Crawford Skikos, representing Danny Swartzell
  • Michael D. Galligan, Esq. of Galligan Newman, representing Bertram Walker Bryant, Jr.
  • Honor Heath, Esq. representing NStar Electric Company

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