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DOJ official wants trustee in Mass. pharmacy case

Published on NewsOK Modified: January 8, 2013 at 10:40 pm •  Published: January 8, 2013

The Framingham-based New England Compounding Center has been shut down since the outbreak was discovered in Tennessee in September. It said in its bankruptcy filing last month that it was facing at least 130 lawsuits by people claiming injury from the contaminated steroid.

On Tuesday, Harrington filed a motion for the appointment of an independent Chapter 11 trustee and an objection to the NECC's application to hire Lowey and his firm, Foxborough-based Verdolino & Lowey, P.C.

In the motion, Harrington noted that "gross mismanagement" by a debtor is among the factors that, if shown, require the court to appoint an independent trustee.

To show gross mismanagement, Harrington cited a Massachusetts state report that detailed results of an inspection conducted after the outbreak, which found a failure to meet cleanliness standards and said the company shipped out drugs before tests results confirmed they were sterile. He also cited the fatal outbreak.

"This gross mismanagement appears to have been long standing, culminating in the voluntary suspension of the Debtor's right to operate, the recall of all of its products and cessation of its operations," he wrote.

Harrington also argued it is wrong for Lowey, in his role as the NECC's "chief restructuring officer," to be expected to lead an investigation of members of the board that appointed him, and which still could fire him "with or without cause."

Besides Lowey, the five-member NECC board is made up of founders and brothers-in-law Greg Conigliaro and Barry Cadden, and two of their relatives.