The Tennessean reported this week that a Federal Judge has agreed to allow creditors the chance to freeze assets of the owners of the company that is blamed with the fungal meningitis outbreak that killed dozens of people last year. The company itself is in bankruptcy.
At issue is whether the assets of the owners (primarily family members) are at risk of losing their assets as well. It is reported that the owners siphoned off roughly $16 Million (yes, you read that right) in wages and profits from the firm in just one 12 month period.
A key issue is what did the owners know and when did they know it. We’ve asked this question before.
Even if the entire $16 Million is recovered it will not likely compensate victims families for the loss they have suffered.
The story is covered by the Boston Globe as well.
Owners of corporations seldom place their assets at risk when the companies fortunes turn sour. The main reason to conduct your business as a corporation or a limited liability company (LLC) is to shield your personal assets and the assets of your family from the claims of the company’s creditors.
However here, it is alleged that the owners ignored the fact that the rooms where the company was compounding drugs were obviously not sterile. They should have been. This may prove to be devastating to these owners. However those who have died or suffered serious illnesses are really the losers.
They’ve lost more than money!