Creditors Probe Meningitis-linked Pharmacy Owners' Pay

Creditors Probe Meningitis-linked Pharmacy Owners' Pay

Creditors Probe Meningitis-linked Pharmacy Owners' Pay

Creditors of the bankrupt pharmacy linked to a deadly U.S. meningitis outbreak are investigating $16 million in salary and shareholder distributions made to company owners in 2012, a lawyer for the group said on Tuesday.

Some of the transfers from the New England Compounding Center, which had 2012 sales of $32.4 million, followed the discovery last fall of the meningitis outbreak that has killed 44 people, according to documents filed late on Friday.

"The bottom line is that instead of using the money to remedy the pharmacy's problems, which now look like a ticking time bomb, they took the money out," said David Molton, a lawyer at Brown Rudnick LLP, which is representing the official committee of unsecured creditors in NECC's bankruptcy.

The unsecured creditors committee, which includes victims of the meningitis outbreak, plans to meet on Tuesday to discuss whether the payments to insiders were proper.

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