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New plan for Dow Corning
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January 10, 1997: 2:43 p.m. ET
Creditors and plaintiffs want breast implant maker to provide $2.95B
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NEW YORK (CNNfn) - Dow Corning's creditors and the women suing the company Friday requested permission to file an alternative plan of reorganization for the breast implant maker with the U.S. Bankruptcy Court in Bay City, Michigan.
The 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, all of Dow Corning's finance and trade 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.
The group is 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.
The rival reorganization plan would require Dow Corning to set up a trust fund of $1.75 billion to pay claims other than disease, such as those for surgery, disfigurement, inflammation, and disability. In addition, a $1.2 billion fund for commercial claims would be established.
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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