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New England Compounding Assets Won’t Be Frozen by Judge

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Nov. 22 (Bloomberg) -- New England Compounding Pharmacy Inc., the Massachusetts company whose injectable steroids have been linked to an outbreak of fungal meningitis, won’t have its assets frozen under a federal court order.

U.S. District Judge Dennis Saylor in Boston rejected a request for an asset freeze by plaintiffs in one of about a dozen cases in the court filed against New England Compounding and six individuals. The plaintiffs sought an order that would have covered as much as $461 million, according to Saylor’s ruling on a preliminary injunction yesterday.

“The court does not see a reason on the present record to seize the intangible assets immediately and put the company out of business,” Saylor said in his ruling. “If nothing else, it appears that public health and the balance of equities favor an orderly and proper recall of the company’s products.”

Saylor ordered New England Compounding not to pay dividends to shareholders, award bonuses to officers and employees that are outside the “ordinary course of business,” or make extraordinary transfers of cash and assets.

Krista Robinson, a spokeswoman for New England Compounding, didn’t immediately return a message yesterday after regular business hours seeking comment on the ruling.

The case is Cole v. New England Compounding Pharmacy, 12-12066, U.S. District Court, District of Massachusetts (Boston).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha @bloomberg.net