Medical Device Maker to Settle Suits Against West Virginia Doctor

May 15, 2009

A medical device maker has told shareholders it is settling out of lawsuits against Dr. John King, the one-time West Virginia osteopath at the center of scores of malpractice claims.

Biomet Inc. has reached agreements with 24 of 27 plaintiffs who sued over bone stimulators made by its EBI subsidiary and allegedly implanted by King during his six-month stint at the former Putnam General Hospital, its Monday filing with the U.S. Securities and Exchange Commission said.

The 27 are among the more than 120 who allege in their suits that King misdiagnosed, harmed and even killed patients after the hospital hired him as a surgeon in 2002.

King, 50, left West Virginia in 2003 after surrendering his medical license. He has since filed for bankruptcy in his native Alabama, and remains a defendant in most of the lawsuits. He could not immediately be located for comment Wednesday.

The King lawsuits have already yielded at least $100 million in settlements with other defendants. The Indiana device maker admits no wrongdoing in the proposed agreements, reached last week.

The 27 cases involve EBI’s Ionic Spine Spacer System and its SpF and OsteoGen implants, the filing said.

The filing said the payments are confidential, though seven of the agreements will require the judge’s approval. Biomet noted in the regulatory filing that it expects to take a $39 million after-tax charge in the fourth quarter after setting aside money for claims relating to King.

A lawyer for the plaintiffs, John Curry of Charleston, declined comment.

The SEC filing coincided with several King plaintiffs agreeing Monday to dismiss a federal lawsuit filed under seal in 2005 and disclosed in January. It alleges that EBI improperly marketed its devices through an illegal kickback scheme that involved King and defrauded federal health care programs. EBI denied those allegations.

Six of the King malpractice cases were slated for a combined civil trial June 1 in Putnam County Circuit Court. Officials there said Wednesday that they were off the calendar in the wake of the settlement agreements.

EBI was initially named in 38 of the King lawsuits, but was dismissed from 11 previously. A second device maker, Wright Medical Technology Inc. is named in 33 of the cases. The Tennessee company has informed shareholders of its potential exposure in those lawsuits, and also noted its insurance coverage for product liability.

Wright Medical had not announced any settlements in its SEC filings as of Wednesday. A lawyer representing the company in the Putnam County cases did not immediately respond to a request for comment.

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