BOSTON (CBS NEWS) -- Attorneys for creditors of a pharmacy linked to a nationwide meningitis outbreak said Monday they have reached a preliminary settlement that would set up a victim compensation fund worth more than $100 million.
Attorney William Baldiga said the agreement was reached among creditors, bankruptcy trustee Paul D. Moore and the owners and insurers of the New England Compounding Center. The deal needs approval from a bankruptcy judge and likely will be filed in the next few weeks.
The company, based in Framingham, just west of Boston, gave up its license and filed for bankruptcy protection after it was flooded with hundreds of lawsuits from people who received tainted steroid injections.
Baldiga represents the creditors' committee set up by the bankruptcy court. Most of the creditors are victims who have filed lawsuits.
About 750 people in 20 states have developed fungal meningitis, an inflammation of the lining of the brain and spinal cord, or other infections; 64 have died.
The infections were linked to more than 17,600 doses of methylprednisolone acetate steroid injections used to treat back and joint pain that were shipped by NECC to 23 states. FDA investigators last Oct. found mold and fungal contamination in vials of the drugs, and areas used to prepare sterile drugs at the facility.
Michigan, Tennessee and Indiana were hit the hardest by the infections.
A federal investigation of the company started more than a year ago but hasn't resulted in any criminal charges. The company's owners said in a press release announcing the settlement that they deny any liability or wrongdoing but want to play a major role in establishing a fund for people who died or suffered.
Victims have until Jan. 15 to file claims.
Baldiga said he expects the fund to grow significantly with contributions from others who may have been sued. He said the settlement was reached over the weekend and those involved wanted to announce it as soon as possible so victims who are considering claims know that there is substantial money available.
The initial $100 million will come from cash contributions by the owners of NECC and proceeds from insurance, tax refunds and the sale of a related business.
Baldiga called it "an important step, but a first step only."
"We expect the fund to grow considerably as we proceed in the weeks and months to come," he said.
Last month, President Barack Obama signed legislation that grants the Food and Drug Administration more regulatory powers over drug compounding pharmacies.
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