Ky. Judge Awards Fen-Phen Clients $20M From Lawyers

October 20, 2006

About 400 people should receive nearly $20 million lawyers held in a controversial fund controlled by three Lexington, Kentucky lawyers in a lawsuit over the diet drug fen-phen, a judge has ruled.

Special Judge William Wehr has ordered that funds from the Kentucky Fund for Healthy Living, which was set up using money from a $200 million settlement in Boone Circuit Court, be placed in a trust for the lawsuits’ plaintiffs, all of whom said they suffered medical problems because they took the diet drug.

Lawyers and consultants involved in the lawsuit received $106 million collectively of a $200 million settlement and also set aside $20 million of the settlement to create the nonprofit fund. The lawyers received roughly $20 million each.

Several clients raised questions about the settlement, and the clients sued the lawyers in 2004, demanding an accounting.

The lawyers sued American Home Products in 2001 and settled the case on behalf of their clients, who said fen-phen damaged their hearts.

After the plaintiffs’ claims were settled, additional money was retained in case other people turned up with a claim.

Earlier this year, Wehr ruled that attorneys William Gallion, Melbourne Mills and Shirley Cunningham Jr. violated their fiduciary duty to their clients by taking more than half the proceeds from the settlement. The lawyers and others involved in the case received about $105 million. The clients received $74 million.

In August, the state Supreme Court temporarily suspended the law licenses of Mills, Cunningham and Gallion until the Kentucky Bar Association could complete an investigation into possible misconduct in the case.

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