New England Compounding Center files for Chapter 11 bankruptcy protection
FRAMINGHAM, Mass. — New England Compounding Center announced the company has filed for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code. The filing seeks to establish a fund to compensate individuals and families affected by a nationwide meningitis outbreak. In papers filed with the United States Bankruptcy Court for the District of Massachusetts, the company said its goal is to provide a greater, quicker, fairer payout to its creditors than could be achieved through piecemeal litigation.
In conjunction with the announcement, the company appointed Keith D. Lowey, a Principal in the Financial Consulting firm Verdolino & Lowey, as Independent Director of NECC and as the company’s Chief Restructuring Officer.
“This will be a cooperative effort,” said Mr. Lowey, who is responsible for NECC’s establishment of the Compensation Fund and dispersing payments to the affected parties. “We want to establish a substantial fund, and then distribute it fairly and efficiently to those who are entitled to relief.”
The NECC seeks to forge a consensual, comprehensive resolution of claims that will be funded by agreements reached among the claimants, the company, its insurers and other parties with potential liability for the meningitis cases, Lowey said. All such claims will be addressed in the U.S. Bankruptcy Court.
“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.”