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Owners Of Pharmacy Linked To Outbreak Got $16M In Final Months

Jay Lindsay, Associated Press
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The New England Compounding Center in Framingham. (Photo by Jared Wickerham/Getty Images)

The New England Compounding Center in Framingham. (Photo by Jared Wickerham/Getty Images)

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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 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 was discovered in Tennessee in September.

The filing late Friday also showed that before the company 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. A company spokesman did not respond to a request for comment on the recent filing.

The pharmacy produced a contaminated steroid, used mainly to treat back pain, that’s blamed for a fungal meningitis outbreak that has killed 44 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.

The company said the purpose of its Chapter 11 filing was to set up a fund to fairly compensate victims. The firm reported that 130 people had filed lawsuits at the time of the filing, and it has told attorneys that it won’t have sufficient funds to adequately compensate victims. In its filing Friday, the firm listed assets of about $1.6 million and liabilities of $885,000 from its unsecured creditors, not including any court judgments against it.

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 is the wife of Doug Conigliaro, Greg’s and Lisa’s brother.

The records also show more than $90,000 in purchases on a company American Express card by Barry and Lisa Cadden and Carla Conigliaro. The three kept using the card after the company shut down in early October, though less frequently and mainly for expenses such as gas, parking or food at stores such as Panera Bread.

Copyright 2013 The Associated Press.

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