Settlement Seeks $100 Million Fund for Meningitis Outbreak Victims

A settlement filed with a federal bankruptcy judge would create a fund of more than $100 million to compensate victims of a nationwide meningitis outbreak linked to a Massachusetts pharmacy, lawyers said Tuesday.

The outbreak, blamed on a tainted steroid produced by the New England Compounding Center, sickened more than 750 people in 20 states, the Centers for Disease Control and Prevention said; 64 people died. The company surrendered its license after the 2012 outbreak, which hit Michigan, Tennessee and Indiana the hardest, and later filed for bankruptcy.

The settlement, which must be approved by Judge Henry Boroff, was reached between the owners of the company and court-appointed bankruptcy trustee Paul Moore. It calls for the company’s owners to pay $50 million into the fund, with its insurers contributing another $25 million.

The agreement would allow the owners to seek $20 million in tax refunds, which also would be contributed to the fund, along with the proceeds of the proposed sale of an affiliated company, Ameridose, bringing the total of the fund to more than $100 million.