|[December 21, 2012]
New England Compounding Center Files for Chapter 11 Bankruptcy Protection, Seeks to Establish Fund to Compensate those Affected by Meningitis Outbreak
FRAMINGHAM, Mass. --(Business Wire)--
New England Compounding Center announced today that the company has
filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The
filing, which was made in the United States Bankruptcy Court for the
District of Massachusetts, seeks to establish a fund to compensate
individuals and families affected by a nationwide meningitis outbreak.
In papers filed with the court, the company said its goal is to provide
a greater, quicker, fairer payout to its creditors than they could
achieve through piecemeal litigation.
The company also announced the appointment of Keith D. Lowey as
Independent Director of NECC and as the company's Chief Restructuring
Officer. Mr. Lowey will be responsible for NECC's effort to establish
the Compensation Fund and commence payments to affected parties.
"This will be a cooperative effort," said Lowey, who is a Principal in
the Financial Consuting firm Verdolino & Lowey. "We want to assemble a
substantial fund, and then distribute it fairly and efficiently to those
who are entitled to relief."
Lowey said that NECC seeks to forge a consensual, comprehensive
resolution of claims which will be funded by agreements reached among
the claimants, the Company, its insurers and other parties with
potential liability for the meningitis cases. All such claims will be
addressed in U.S. Bankruptcy court.
Mr. Lowey will be in charge of NECC's conduct of the Chapter 11 case and
its effort to work cooperatively with those impacted by the meningitis
"We want to confirm the Chapter 11 plan establishing the Compensation
Fund as soon as possible," Lowey said.
To accomplish this goal, NECC's bankruptcy counsel, Daniel Cohn of
Murtha Cullina LLP, emphasized that claimants and their lawyers will be
actively involved. "We expect that a committee of meningitis claimants
will be appointed to represent the entire group," said Cohn. "That will
help assure that an appropriate amount will be collected and contributed
to the Compensation Fund, and that the money will be distributed fairly."
"Many families across the U.S. have been impacted by this great tragedy,
and it is difficult to comprehend the sense of loss so many people have
experienced. Everyone associated with New England Compounding Center
shares that sense of loss," Lowey said. "We recognize the need to
compensate those affected by the meningitis outbreak fairly and
appropriately. We hope that by establishing this Fund under Chapter 11
of the U.S. Bankruptcy Code, those families impacted by this tragedy may
be compensated as quickly as is possible."
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