New boss of meningitis-linked firm is poor choice: U.S. official

BOSTON Tue Jan 8, 2013 12:09pm EST

A sign for pharmaceutical compounding company New England Compounding Center (NECC), a producer of the steroid methylprednisolone acetate, is seen in Framingham, Massachusetts October 8, 2012. REUTERS/Jessica Rinaldi

A sign for pharmaceutical compounding company New England Compounding Center (NECC), a producer of the steroid methylprednisolone acetate, is seen in Framingham, Massachusetts October 8, 2012.

Credit: Reuters/Jessica Rinaldi

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BOSTON (Reuters) - The person hired to run the bankrupt pharmacy linked to a deadly U.S. meningitis outbreak is "hopelessly conflicted" and should be removed from the job, a U.S. Justice Department official said on Tuesday.

William Harrington, the U.S. Trustee for Region One, argued that New England Compounding Center's board should not be able to hand-pick its chief restructuring officer.

NECC filed for bankruptcy protection last month after U.S. authorities shut down its pharmacy operations amid a meningitis outbreak that has killed 40 people and sickened 664 others, according to the U.S. Centers for Disease Control.

NECC shipped thousands of vials of a fungus-tainted steroid to medical facilities throughout the United States, according to authorities.

Before filing for bankruptcy protection on December 21, NECC's board hired Keith Lowey of Verdolino & Lowey PC to liquidate its assets and create a compensation fund for meningitis victims. NECC's ownership and board includes the suburban Boston families of recycling entrepreneur Greg Conigliaro and NECC's chief pharmacist Barry Cadden. Conigliaro's sister, Lisa, is married to Cadden.

Harrington asked the bankruptcy court to deny NECC's application to retain Lowey and his firm as financial advisers and accountants. Lowey did not return a telephone call seeking comment.

"The (chief restructuring officer) is hopelessly conflicted in this engagement due to his appointment by the board," Harrington said in a motion filed on Tuesday. "... It is essential that the debtor's affairs be managed by a truly independent fiduciary, not subject to the direct or indirect control of (NECC management)."

Harrington is the U.S. Trustee for a region that includes Massachusetts and other New England states. The U.S. Trustee Program is the component of the Justice Department responsible for protecting the integrity of the bankruptcy system.

Harrington asked the court to appoint a Chapter 11 trustee to oversee the case.

The case number for New England Compounding's Chapter 11 bankruptcy case is 12-19882-HJB.

(Editing by Jeffrey Benkoe)

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Comments (2)
fpleti wrote:
The real question that has yet to be addressed is:

Where did they get their raw materials for the compounding – domestic or China? That is where this investigation needs to focus.

Jan 08, 2013 8:47pm EST  --  Report as abuse
I contracted bacterial meningitis during the first few days i was born, they had to create a vaccine for me in order to save me. i now suffer from hearing loss, learning disabilities, constant pain, the dr said i dont have restless leg syndrome, i have restless body syndrome. my husband cant even share the same bed with me b/c of the way i toss, turn, jerk, spasm, twitch, cuss in my sleep which does eventually wake me up, im on pain meds, Valium and meds for parkinsons.1 of my cousins lost her almost 4 yr old To the same type 2 weeks b4 christmas, almost 4 weeks b4 her 4th birthday as did 1 of her sisers, she lost a 2 month old daughter to it. my advice to ppl who haVE relatives who contracted the more severe types of meningitis is Let Them Die. i hate how i have to live this way. all the life long after affects i deal with.

Jan 09, 2013 1:48am EST  --  Report as abuse
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