BOSTON — An independent trustee must be appointed to oversee the bankruptcy of a Massachusetts pharmacy linked to a meningitis outbreak because of the firm’s “gross mismanagement,” among other reasons, a Justice Department official argued Tuesday.
U.S. Trustee William Harrington also argued in his motion that an accountant the New England Compounding Center hired to lead it through the Chapter 11 process had a hopeless conflict of interest because the NECC’s board can fire him at any time.
Harrington accused the NECC of hiring Keith Lowey and appointing him to its board just before it filed for bankruptcy “in an apparent attempt to forestall the appointment of a trustee.”
Daniel Cohn, the NECC bankruptcy attorney, said the company would oppose the motion for appointment of a trustee because it would hinder progress toward the purpose of its bankruptcy filing, which the company has said was to set up a fund to fairly compensate victims.
A tainted steroid made by the NECC has been linked to a fungal meningitis outbreak that has killed 40 and sickened more than 600 since this summer.
— U-B wire reports