The trustee managing the New England Compounding Center has filed a proposed $100,000,000 settlement with victims and creditors. Over seven hundred people were sickened by tainted steroids and sixty four died.
The case is New England Compounding Pharmacy Inc., 12-bk-19882, U.S. Bankruptcy Court, District of Massachusetts (Boston). The original bankruptcy schedule of assets and liabilities can be found here.
The settlement is comprised of $47.75M from the owners assets, $20M in uncollected tax refunds and $10M from the sale of a related business. The owners will also turn over to the trustee $29M collectible under liability insurance policies. Despite only issuing a $6M limit policy Pharmacists Mutual will contribute $15M. Maxum Indemnity, which issued a $5M policy in excess of Pharm Mutual will pay $10.2M. Preferred Mutual Insurance Company, which insured an affiliated property business, will pay $3.75M.
The settlement does not include the payments made by insurances companies for the dozens of independent facilities and physician groups who were sued over the use of the tainted steroids.
The case shows the continued catastrophic nature of medical malpractice and product liability claims. Working with an pharmacy liability insurance broker and carefully managing contingent liability both up and down stream can help protect your business. Contact us today to discuss restructuring your insurance program to lower costs and increase coverage.