Originally created 06/28/99

Hearing to begin on Dow Corning implant settlement



DETROIT -- The final legal step in a settlement between the Dow Corning Co. and thousands of women with silicone breast implants begins Monday with a judge opening weeks of hearings on whether to approve a $4.5 billion bankruptcy plan.

Both the company and lawyers for the women say the $3.2 billion settlement included within the bankruptcy plan is the best compromise that could be reached.

But they face objections from the federal government, lending institutions and some women, all of whom claim the settlement plan leaves too little for their claims and gives too much protection to the company and its corporate parents.

The hearing before U.S. Bankruptcy Judge Arthur Spector is being held in a high school auditorium in Essexville, 100 miles northwest of Detroit, because it is the largest space near the bankruptcy court in Bay City that can handle the expected throng of lawyers and plaintiffs.

"There's a group of us that's tried to make every single hearing in Michigan," said Peggy Pardo, a breast implant claimant who is driving seven hours to the hearing from Chicago. "It took us a long, long time to get to this point."

Dow Corning was sued by some 170,000 women. Their proposed settlement is the cornerstone of the company's $4.5 billion bankruptcy reorganization plan, which plots how Dow Corning will pay off about 570,000 creditors -- including the women, banks that hold Dow Corning's debt, insurance companies, doctors and hospitals.

The Midland-based company filed for bankruptcy in 1995 after thousands of women started suing, claiming breast implants of Dow Corning silicone caused a variety of diseases.

Under the proposed settlement, women who blame illnesses on Dow Corning silicone implants could get $12,000 to $300,000 each. Women could also receive up to $25,000 for ruptured or leaking implants, and up to $5,000 for implant removal.

Women outside the United States would be paid 40 percent to 65 percent less for their claims, depending on where they live. Dow Corning said that was due to lower medical costs and different economic conditions in other countries.

The company would set aside up to $400 million to cover any costs of defending lawsuits by women who reject the settlement.

Nearly 113,000 women voted on the settlement terms earlier this year, and 94 percent approved. One of them was Pardo, who had implants made with Dow Corning silicone.

"I'm not going to say the settlement is perfect by a long shot, but I know there are many women desperately in need of help and they can't wait anymore," said Pardo, a support group leader for people with implant-related problems.

Among those objecting to the settlement are 49 women in Nevada and the estate of another. Their lawyers contend a clause shielding parent company Dow Chemical from further lawsuits is unconstitutional.

Another major objection comes from women in the countries where payments are reduced 65 percent. Lawyers representing them say the payments should be larger.

Lenders that hold $1.3 billion in Dow Corning debt voted against their part of the bankruptcy plan even though it pays them in full, saying the interest rate set by the company was wrong.

And the U.S. Department of Justice has objected, saying the plan doesn't provide enough to pay for health care the government has provided to people with silicone implants.

A Dow Corning lawyer, Barbara Houser, says no objection raised so far should prevent the judge from approving the settlement with the women.

And a lawyer for the committee representing breast implant claims said the plan was as good as it could be.

"That's the reason we agreed to it. It wasn't because we liked it," said lawyer Ralph Knowles.