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Proposed Fungal Meningitis Settlement: $100M for Victims

By Brett Snider, Esq. | Last updated on

Plaintiffs who sued after a deadly fungal meningitis outbreak have reached a settlement with the Massachusetts pharmacy blamed for the infections.

The New England Compounding Center is accused of distributing steroid injections tainted with deadly fungal meningitis, which was linked to at least 64 deaths in 20 states, reports the Detroit Free Press. NECC has now agreed to set aside $100 million for victims of tainted steroid shots.

What will this settlement mean for fungal meningitis victims and their families?

Steroid Injections Linked to Fatal Disease

As early as October 2012, fungal meningitis outbreaks in several states were linked to steroid injections -- specifically methylprednisolone acetate -- distributed by the New England Compound Center (NECC) in Framingham, Massachusetts.

Not long after, NECC was sued by the first of hundreds of victims who were allegedly infected with fungal meningitis via contaminated steroid shots traced to the Center. Since then, NECC has shut down and surrendered its licenses, but the number of cases of fungal meningitis from its product is in the hundreds.

According to a press release by the plaintiffs' attorneys, the lawsuits against NECC had initially been consolidated in Massachusetts federal court but were later transferred to bankruptcy court which must now approve the proposed $100 million settlement. NECC filed for Chapter 11 bankruptcy in December 2012, effectively putting these fungal meningitis lawsuits on hold.

Judicial Approval of Settlement

Even with the cases put on hold, it didn't stop each side from attempting to negotiate a settlement, which appears to have been reached at $100 million. According to the plaintiffs' attorneys' press release, the settlement will include:

  • $50 million from NECC owners Barry Cadden, Lisa Cadden, Carla Conigliaro, and Greg Conigliaro;
  • $10 million from the owners' tax refunds;
  • More than $25 million from NECC's insurance companies; and
  • $9 million from the sale of Ameridose, a related company.

There are reportedly 3,300 claimants eligible for a piece of these settlement funds, but a judge must approve the deal before anyone sees a dime. The bankruptcy court will consider whether the settlement deal was made in good faith by both parties and if the terms aren't unreasonably biased.

Injury settlements can also be rejected if a judge feels that the settlement amount is not enough to satisfy all individuals in a suit. With the average claimant set to receive about $30,000 in the proposed settlement, it will be up to a judge to decide if this amount is sufficient.

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