Did Compounding Pharmacy Owners Cash Out?
Bankruptcy filing shows New England Compounding Center paid its owners $16 million last year.
Published: January 22, 2013
New England Compounding Center, the pharmacy at the center of a fungal meningitis outbreak that's left 44 dead and 678 sickened in 19 states, paid its owners $16 millions in wages and profits from Dec. 2011 through Nov. 2012, according to an article in the Boston Globe.
The figure is equal to approximately half NECC's sales for those 12 months, the Globe reports. According to Chapter 11 bankruptcy filings cited by the newspaper report, "family members racked up $90,000 on corporate American Express credit cards, including charges made after the company shut down in early October" although NECC "reported it had just $1.3 million in cash and owed nearly $900,000 to unsecured creditors such as FedEx, not counting potential legal costs."
The Globe further reports that the owners pulled millions out of the company over the last year: $6 million by head pharmacist Barry Cadden, RPh, and his wife, Lisa; $1.6 million by Lisa's brother, a shareholder; and $8.7 million by the majority shareholder, the wife of the physician co-founder. The report quotes Fredric Ellis, a Boston lawyer representing victims of the outbreak, as saying that, even though there's no evidence these actions were illegal, "They were clearly taking a lot of money out while it was operating. They cashed out, no doubt about it."
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