Here's an example of a Fortune 500 company driven into bankruptcy by a grass roots effort. Dow Corning is again an active company.
Implant deal draws critics Dow Corning plan falls short, attorneys say
February 18, 1998
BY DAVID ASHENFELTER
Free Press Staff Writer
Too little money, too long to get it, but a step in the right direction.
That's how attorneys and advocates for women who complained of health problems after receiving Dow Corning breast implants described the Midland company's new plan to settle 177,000 claims resulting from the silicone products.
The plan, announced in a telephone news conference Tuesday, offers $4.4 billion to creditors -- including $3 billion for women with breast implant claims -- to settle all claims against the company so Dow Corning can emerge from bankruptcy.
"Dow Corning is again offering too little too late," Sybil Niden Goldrich said Tuesday. Goldrich is co-founder of Command Trust Network Inc., an information clearinghouse for women with silicone breast implants. "I am extremely disappointed that Dow has failed again to provide fair compensation in a timely way for women who have suffered."
The company, saying women are likely to find the plan more attractive than their attorneys do, voiced optimism that its latest reorganization plan would fare better than one U.S. Bankruptcy Judge Arthur Spector of Bay City rejected in November on grounds it was inadequate.
"We wouldn't expect the trial lawyers to instantly jump on board with this plan," Dow Corning President Gary Anderson said. He said the company based the plan on settlements paid by other breast implant manufacturers, the results of focus groups with women who have implants and Spector's objections to the previous plan.
"We are highly confident that we're going to have a very high acceptance rate of this plan, and we think women will find this plan very attractive," Anderson said.
Goldrich and several lawyers complained that the plan, which the company filed Tuesday in Bay City, encourages women to accept $1,000 in exchange for giving up future rights to sue if they develop medical problems. She also said the plan restricts most sick women to payments of $10,000 and that many would have to wait 10 years or longer to have their claims settled, which a company spokesman denied.
The company, a 50-50 joint venture of Dow Chemical Co. of Midland and Corning Inc. of Corning, N.Y., filed for Chapter 11 bankruptcy protection in 1995 after tens of thousands of women filed lawsuits alleging health problems resulting from silicone breast implants. Dow Corning was the leading maker of silicone implants until it withdrew them from the market.
The company said $3 billion of the money would be used to settle breast implant claims in the next 16 years, offering women 15 settlement options that provide from $1,000 to $200,000 per woman depending upon the severity of illness or disability. Some women could get more money if they have uninsured medical bills that exceed their settlement payment, the company said.
The plan provides $640 million more in breast-implant settlement money than the earlier plan. The other $1.4 billion of the $4.4-billion plan would be used to pay off lenders and other commercial creditors. The amount is $100 million greater than Dow Corning proposed in the earlier plan. The money is to come from cash reserves, future earnings and money from insurers.
The judge is to decide whether to put the latest plan to a vote of creditors, including the women with claims. A two-thirds majority is required to move the plan forward.
Associated Press contributed to this report.
