Lawyers for two people who claim they contracted meningitis from contaminated steroid injections made by a Massachusetts pharmacy asked a judge on Tuesday to freeze up to $461 million in assets of the pharmacy, its owners and two related companies while lawsuits are pending.
Michele Erkan, of Red Lion, Pa., and Robert Cole, of Nashua, N.H., filed lawsuits in federal court last week alleging tainted steroids made by New England Compounding Center caused their meningitis. Erkan said in her lawsuit she was bedridden for more than a month, suffering from nausea, vomiting and severe headaches. Cole's lawsuit says he was hospitalized for 12 days.
NECC, based in Framingham, is under investigation for distributing a steroid that's sickened more than 400 people, more than 30 of whom have died. A sister company, Ameridose, based in Westborough, has voluntarily closed through the end of the year. The lawsuits also name six company principals and Ameridose's marketing and support arm, Medical Sales Management Inc., as defendants.
Inspections at NECC's facility found a host of potential contaminants, including standing water, mold and water droplets.
Attorney Thomas Sobol, who represents Erkan and Cole, argued that because of the large number of people sickened by the steroid, the combined assets of NECC, its related companies and executives will be "far too small to pay for the claims." Sobol, who's seeking class action certification to file on behalf of other victims, asked U.S. District Judge F. Dennis Saylor IV to issue an injunction prohibiting the companies and management from transferring or concealing assets.
Sobol said the injunction doesn't seek to stop company officials from paying normal expenses such as college tuition for their children but does seek to stop them from selling valuable assets. He lists in his motion several expensive properties owned by company executives, including a $3.5 million home in Southborough and a vacation home in North Kingston, R.I.
Lawyers for NECC, Ameridose and company executives argued that freezing assets would be a radical move so soon after the lawsuits were filed, when allegations against the pharmacy haven't been proved.
"They have not put any evidence in," NECC lawyer Alan Winchester said.
Winchester said the company is still operating, with a core group of employees working on the recall of its products.
He said Erkan says in an affidavit filed with her lawsuit that she received her steroid in November 2011, long before batches of steroids from NECC were recalled. He also said Erkan says she had meningitis but doesn't specify that it was fungal meningitis, the illness caused by the contaminated steroids.
Winchester also said there's no indication any of the company principals has done any inappropriate spending and there's no need to freeze their assets.
A lawyer for Ameridose said it is a separate business entity with a separate product line.
The judge didn't immediately rule on the request to freeze assets. He said the Erkan and Cole complaints are among 12 lawsuits he's handling.
This program aired on November 20, 2012. The audio for this program is not available.