A major settlement reached with insurance companies will provide "a very significant amount" for victims in a nationwide fungal meningitis outbreak, including dozens from Tennessee, an official said Friday.
Paul D. Moore, trustee in the bankruptcy of the New England Compounding Center, said the agreement was with the the primary insurer for the now-shuttered drug company blamed for the outbreak. He said there was also an agreement with the insurer for another defendant in a series of civil suits that have been merged before a federal judge in Boston.
Moore described the settlement amount as "a very significant number," but said he could not yet disclose the details.
"Of course, it's never enough," he conceded.
Noting that the fungal meningitis outbreak occurred more than a year ago, Moore said the delay was "intolerable. We want to get this done."
Disclosure of the settlements, which will be subject to court approval, followed a Friday court hearing in Boston before the federal judge who is presiding over dozens of suits filed by victims of the meningitis outbreak, including more than 50 from Tennessee.
Michael Gottfried, who represents Moore in the civil cases, told U.S. District Judge F. Joseph Saylor IV that there was a partial settlement but did not disclose any details.
Records in the NECC bankruptcy case show that NECC itself had at least three insurance policies, but the full details of the coverage have not been disclosed. Details of insurance coverage for the other defendants have not been made public either.
Agreements with the insurance companies are regarded as a key issue because they are likely to be one of the primary sources of funds to pay claims of the hundreds of victims of the 2012 outbreak. Nationwide, 64 patients died and 754 were sickened by fungus-tainted steroids shipped by NECC to doctors, clinics and hospitals around the country.
The other possible source of funding claims could come from a freeze of up to $21 million in assets by NECC's owners imposed by a federal bankruptcy judge in late January.
"This is an important step in holding the wrongdoers accountable for the harm they caused. We still have much work to do to bring all of the wrongdoers to justice," said Mark Chalos of Nashville, one of the attorneys for victims who participated in the Friday hearing.
The case before Saylor includes claims filed by victims from Tennessee, Virginia, Michigan, New Jersey and Virginia. According to the latest federal data, 16 patients from Tennessee died in the outbreak while 153 were sickened. Only Michigan, with 264 victims and 19 deaths, had more than Tennessee.
Saylor called the case "unusual" and acknowledged that he was not familiar with the various state laws that will be important in deciding the case.
"I can state with confidence that I know next to nothing about Tennessee or Virginia law," Saylor said.
"We kind of have a doughnut," he added, noting that because of NECC's bankruptcy, the Massachusetts drug compounding firm was not in the case.
"I think the time has come to get organized," Saylor said.
During the hearing, attorneys for the defendants -- including the Saint Thomas Outpatient Neurosurgical Center in Nashville, one of three Tennessee clinics that received the potentially tainted steroids -- argued over the content and deadlines for providing information about the victims of the outbreak, including whether any were HIV-positive.
J. Gerard Stranch of Nashville, one of the attorneys for victims of the outbreak, said plaintiffs had proposed a form to be filled out by victims and an authorization form for medical records to be released to lawyers in the case that was similar to forms used in the ongoing bankruptcy.
While Stranch said the form provided sufficient information, Marcy Greer, an attorney for Saint Thomas Health, said the form proposed by the plaintiffs would not provide needed historical information on the victims. She said HIV information was needed because it would indicate a compromised immune system.
She charged that limiting the information would result in "a one-sided fight," and she urged the judge to consider first issues that could end her client's involvement in the case.
"If we're right, then we shouldn't be here," she said.
Saylor deferred a decision on the medical history forms, stating, "I'm not going to decide this on the fly. I'm going to think about it."
He added that he was likely to turn the issue over to a judge magistrate who ha