BOSTON (AP) — The owners of a pharmacy linked to a fatal meningitis outbreak received more than $16 million in wages and payments as the company grew increasingly prosperous in its final months.
The four family members, who served as the New England Compounding Center's directors, received the money between late December 2011 and late November 2012, according to a bankruptcy court filing. The largest payout went to the firm's majority shareholder, Carla Conigliaro, who received $8.7 million.
The vast majority of the money paid to the owners was distributed before the outbreak of meningitis, an inflammation of the lining of the brain and spinal cord, was discovered in Tennessee in September. But an attorney for unsecured creditors in the case, including victims who received tainted injections of a drug made by the NECC, said it's distressing that the company had the money to clean up the conditions that led to the outbreak but never did it.
"There was a substantial amount of cash available that could have been used to clean things up, to make things right, and instead was being taken by insiders," said attorney David Molton, of Brown Rudnick LLP, which represents the Official Committee of Unsecured Creditors.
A company spokesman didn't respond to a request for comment Tuesday.
The NECC filing late Friday also showed that before it shut down in early October, its net sales were on pace to double over just two years. The pharmacy had increased its net sales from about $20 million in 2010 to $32 million in 2012, before it closed with a quarter of the year remaining.
The firm filed for Chapter 11 bankruptcy on Dec. 21.
The pharmacy produced a contaminated steroid, used mainly to treat back pain, that is blamed for a fungal meningitis outbreak that has killed 44 people and sickened more than 600.
State inspectors at the company's Framingham facility have flagged unsanitary conditions and said the company shipped out drug batches suspected in the outbreak before tests had confirmed their sterility.
Friday's filing indicates that between December 2011 and November 2012, co-founder Barry Cadden, the company's chief pharmacist, received $3.2 million, including a bi-weekly salary of about $17,900. His wife, Lisa Cadden, received about $2.8 million, mainly in shareholder payments.
Co-founder Greg Conigliaro, Lisa Cadden's brother, received about $1.6 million. Carla Conigliaro, recipient of the $8.7 million payment, is the wife of Doug Conigliaro, Greg's and Lisa's brother. Continued...