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New plan for Dow Corning
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January 10, 1997: 12:58 p.m. ET
Creditors, plaintiffs offer new reorganization plan
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NEW YORK (CNNfn) -Dow Corning's creditors and the women suing the company will file an alternative plan of reorganization for the breast implant maker as early as Friday.
Sources close to the group told CNNfn the two sides- creditors and plantiffs- have reached an agreement and will file a new plan with Michigan Bankruptcy Court Judge Arthur Spector.
Creditors and plaintiffs -- known as the tort group -- have been in talks over the past few weeks.
The new plan competes with the company's own reorganization plan filed Dec. 2. Faced with billions of dollars in potential liabilities, the company sought bankruptcy protection in May 1995.
Under the alternative plan, creditors are seeking to be fully reimbursed. The plan also proposes a new procedure that would help determine if the silicone-gel breast implants do cause various diseases as plaintiffs have alleged.
Creditors and the tort group are proposing that 30 scientific trials be conducted to determine if the products cause disease. Under the company's own plan, one trial would be conducted.
A trust fund of $1.75 billion in cash and securities would be established by Dow Corning using cash and equities. The percentage of equity given up by the company would be determined by the outcome of the 30 scientific trials.
If the trials determine that the products do cause disease, control of the company would be turned over to the trust, and in turn, to the plaintiffs. If not, no exchange in ownership would occur.
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