ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Saturday, January 11, 1997 TAG: 9701130111
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Dow Corning Corp. creditors have agreed on a bankruptcy reorganization plan that could pay women with breast implants billions of dollars more than a competing proposal made by the company.
The plan would require Dow Corning to pay out $2.95billion now to implant recipients and business creditors. Eventually, it could force Dow Corning's owners to cede up to 95percent of their stock - worth billions more - to pay claims that breast implants cause debilitating diseases.
Lawyers for the implant recipients and lawyers for the business creditors asked a bankruptcy judge in Bay City, Mich., on Friday for permission to formally submit the plan to him. Currently, only Dow Corning is permitted to propose a plan.
Judge Arthur Spector's decision could mark a major milestone in the bankruptcy case because the two proposals use vastly different methods of deciding if implants make people sick.
The women and business creditors, uncommon allies because of their different interests, have been trying to forge a joint proposal for six months to ensure they get as much money from the company as possible.
Much of the plan was disclosed two weeks ago. Their lawyers said Friday it would resolve Dow Corning's bankruptcy faster than the company's competing $2billion proposal and would be more fair to women.
Dow Corning stood by its proposal and said the new plan would slow the reorganization.
Dow Corning filed for bankruptcy in May 1995, largely because of 19,000 lawsuits alleging that breast implants had leaked and ruptured, causing pain, disfigurement and diseases such as rheumatoid arthritis and lupus. The filing froze all claims against the company until a reorganization plan is approved.
To resolve whether implants cause disease, the creditors propose a series of 30 ``representative'' trials around the country including testimony of implant recipients. If Dow Corning loses those trials, its owners, Dow Chemical Co. and Corning Inc., would have to turn over up to 95percent of their stock in the company to compensate the hundreds of thousands of implant recipients.
Dow's plan would pay just $600million for localized problems and $1billion for business creditors. The disease issue would be resolved by a single trial with testimony only from scientists.
LENGTH: Medium: 51 linesby CNB