TCR_Public/970825.MBX



content="text/html; charset=iso-8859-1">

InterNet Bankruptcy Library - News for August 25, 1997







Bankruptcy News For August 25, 1997




        
  1. Response to Dow's Bankruptcy Proposal:
            'This Plan Is Woefully Inadequate' - Attorney Ed
            Blizzard, Reports Command Trust Network

  2.     
  3. Dow Corning Announces New Plan of
            Reorganization to Resolve Chapter 11 Filing; $2.4 Billion
            Directed to Breast Implant Settlement






Response to Dow's Bankruptcy Proposal:
'This Plan Is Woefully Inadequate' - Attorney Ed Blizzard,
Reports Command Trust Network



WASHINGTON, DC - Aug. 25, 1997 - The following was released by
Command Trust Network, a national silicone implant clearinghouse:



Dow's reorganization plan to
emerge from bankruptcy falls short in numerous crucial areas,
according to members of the Tort Claimants Committee, the
committee representing women with Dow Corning implants.



Key failings of Dow Corning's proposal:



- Inadequate compensation for women injured by broken and
leaking implants: A woman with a broken implant requiring
multiple surgeries to remove



the implant and running silicone would get $5,000 to $8,000,
far less



that a complicated series of surgeries would cost. "This
proposal leaves many women having to pay out of their own pockets
to clean up



the damage Dow did in their bodies," said Sybil Goldrich,
a member of



the negotiating committee for the Tort Claimants.



-- Protracted delays in trials: Dow claims that women unhappy
with the compensation could still seek



a trial, but provisions in the plan limiting the number of
trials per



year would probably delay trials for decades.



-- Centerpiece of this proposal lets parent company, Dow
Chemical, off the



hook: Last week, Dow Chemical (Dow Corning's parent company)
was held by a



Louisiana jury to be at fault on seven counts in failing to
tell the



public about the dangers of silicone. Despite this significant
legal



precedent, this proposal provides a complete release for Dow
Chemical



in liability for implant injuries to women with Dow's breast
implants.



"It is outrageous that this plan would bail out a non-
bankrupt company



like Dow Chemical, without them then having to contribute a
dime," said Dawn Barrios, one of the attorneys for the
Louisiana women.



-- Lack of negotiation by Dow: Sybil Goldrich, a member of the
Tort Claimants Committee, said, "It is extremely
disappointing that over two years into this bankruptcy Dow chose
to put out a plan without seeking the input of the women injured
by their products."



-- Summary: To summarize, Goldrich said, "Although it is
encouraging that Dow is



admitting its responsibility for the harm its product has
caused, this proposal is inadequate and unfair."



SOURCE Command Trust Network /CONTACT: Linda Ricci, pager,
888-769-2790, or Karin Wallestad of Fenton Communications,
202-822-5200, both for Command Trust Network/






Dow Corning Announces New Plan of
Reorganization to Resolve Chapter 11 Filing; $2.4 Billion
Directed to Breast Implant Settlement



MIDLAND, Mich., Aug. 25, 1997 -- Dow
Corning
today announced a new $3.7 billion Plan of
Reorganization to resolve all claims in its Chapter 11 bankruptcy
case. The plan provides $2.4 billion for resolving breast implant
and other product liability claims through several flexible
settlement options. Distribution of funds in the plan is linked
to the number of people voting to accept it. As more people vote
for the plan, payment for individual settlements increases
because less money is required for the trial process. $1.3
billion of the total $3.7 billion plan will be used to satisfy
commercial claims.



"Women with breast implants can be reassured by the
overwhelming research showing that while implants can cause local
complications, they pose no substantially increased risk of
disease," said Gary E. Anderson, president. "However,
some women with implants have rejected the findings of that
research. This new plan provides them with settlement options and
offers closure."



The settlement breaks new ground, with individual payments for
breast implant claims ranging from up to $1,000 for expedited
payments to up to $200,000 for medical conditions. The exact
amount depends both on the settlement option and the percentage
of women voting for the plan.



Women voting to accept the plan can choose among four
settlement options, ranging from an "expedited payment"
designed for fast processing and requiring less documentation to
higher payments for defined medical conditions requiring more
documentation and a detailed evaluation. The options also include
a medical procedure program that compensates any woman who
chooses to have her Dow Corning implants removed for any reason
and offers a range of surgical procedures should they be
medically required. This unique option was developed directly in
response to requests from women with implants. Additionally, the
plan will accommodate foreign claimants.



"The plan guarantees that anyone qualifying for the
expedited payment, rupture, or medical procedure options will
receive 100 percent of the payment level that results from the
voting," said Anderson.



Women can choose to go through the trial process rather than
settling their claims by voting against the plan. However, as
more people vote for the plan, more dollars are devoted to
settlement. For those voting against the plan, a binding common
issue causation trial to resolve whether sufficient scientific
evidence supports claims that implants cause disease will occur
before any individual trials can take place. Women voting for the
plan will not be affected by the causation trial.



"The growing body of comprehensive and respected medical
studies along with numerous court decisions support the view that
implants do not cause disease," Anderson said.
"However, this plan is an effort to conclude the breast
implant controversy and offer women settlement options while also
preserving the right for both sides to vigorously argue the
merits of the scientific evidence in court."



Dow Corning Corporation, a global leader in silicon-based
materials, is a Michigan corporation with shares equally owned by
The Dow Chemical Company (NYSE: DOW) and Corning Incorporated
(NYSE: GLW). More than half of Dow Corning's sales are outside
the U.S.



Settlement Grid Approved by 92%



Domestic Breast Implant Claims



Approved by 80% Settlement Option Approved by 66 2/3%



Base Enhanced Extra Enhanced Grid Grid Grid



Expedited Payment 650 800 1,000



Rupture 5,000 6,000 8,000



Medical Procedures Program Approved Procedures Covered, plus
$1,000



for reasonable expenses



Symptoms/Medical Conditions.. Level One - MDL Qualification
2,500 3,500 4,500 Level Two 10,000 15,000 20,000 Level Three
30,000 40,000 50,000 Level Four 70,000 90,000 110,000 Level Five
150,000 175,000 200,000 Rupture add-on payment 5,000 6,000 8,000
Multi-Manufacturer Adjustment 50% 50% 50%



(all amounts in U.S. $)



.. The payments listed above are for those processing current
claims and compensates them for the delay they have experienced
in settling their claims. Those who may qualify for the
Symptoms/Medical Conditions option in the future would be paid at
20 percent of the listed amounts.



FREQUENTLY ASKED QUESTIONS AND ANSWERS PLAN OF REORGANIZATION



Q. I filed a claim in this case. Must I take any action now to
qualify?



A. No.



Q. How can those who filed claims vote for this plan?



A. The Court must first have hearings and approve documents
related to the plan. Once approved, those who filed claims will
receive a complete package of information, including very
specific voting procedures.



Q. How does the vote from those filing breast implant claims
impact the approval of the plan?



A. Basically, among those with breast implants who vote, 2/3
must vote for the plan. However, if 80% vote for the plan, they
will receive an



increased payment, and if 92% vote for it, they will receive
even greater increased payment.



Q. Why is Dow Corning filing a new Plan of Reorganization?



A. We want to bring closure to this long-running controversy.
The best way to do that is to settle. This new plan directs the
majority of funds toward flexible settlement options.



Q. By compensating women for Qualified Medical Conditions,
does this mean



that Dow Corning believes breast implants cause disease?



A. No. We know that breast implants can cause local
complications and in



some cases, rupture can occur. This plan compensates women for
those



conditions, just as we have in the past. Women can be
reassured by the overwhelming evidence that silicone breast
implants do not cause disease. However, we have a responsibility
to bring closure to this long-running controversy and we believe
our plan does that. It offers



women flexible choices in how they can settle their claim. In
addition, people voting for the plan can influence how much they
are paid. The more women who vote for the plan, the greater their
individual settlements.



Q. How many breast implant claims have been filed in Dow
Corning's case?



A. Based upon Dow Corning's current analysis, there are
approximately 150,000 U.S. claims for Dow Corning breast implants
and 50,000 non- U.S. claims for Dow Corning breast implants.



Q. If a person has not filed a proof of claim form with the
Court, is it



too late to be included?



A. Since the deadline for filing claims has passed, the only
way to file



a claim now is by filing a motion with Judge Arthur Spector in
the U.S. Bankruptcy Court in Bay City, MI.



Q. Is there likely to be enough money in the settlement so
that women will receive the scheduled amount of compensation?



A. Dow Corning believes the funding is adequate. This is
unlike the previous Global Settlement where more claims were
filed than anticipated. In this case, all of the claims were
filed before the plan was calculated. The settlement payments are
based on already filed claims, and no additional claims can be
filed without court approval. The plan also guarantees that
anyone qualifying for the expedited payment, rupture, or medical
procedure options will receive



100% of the payment level resulting from the voting.



Q. How will commercial claims be paid under this plan?



A. Commercial claims will be paid in full, with interest,
under the plan.



30% will be paid in cash and 70% in Senior Notes that will
mature on the seventh anniversary of the effective date, with
interest payable in semi-annual installments at the Plan Interest
Rate.



Backgrounder: Choices for Women Dow Corning Plan of
Reorganization



Dow Corning's new plan of Reorganization provides women with
silicone breast implants, as well as people with Dow Corning
medical devices, a variety of options to settle their claims. A
unique feature of the plan is that people with claims can
influence the amount of money they receive by voting for the plan
in greater numbers.



Most of the funds in the plan are designated for settlement,
although the option remains of pursuing claims in court. The plan
calls for establishing two trusts: the Settlement Trust will
administer claims filed by those voting for the plan, while the
Litigation Trust will allow those voting against the plan to go
through the trial process.



Settlement Trust



Those voting for the plan, who have allowed breast implant or
other product claims, will be paid through a Settlement Trust
managed by independent trustees. Women with current claims, as
well as those who may have a claim to process in the future, can
choose options to suit their individual circumstances. However,
women who have current claims will be eligible for higher
payments to compensate them for the delay they have experienced
in resolving their claims.



Women with Dow Corning breast implants who vote for the plan
will have four settlement options:



Option One/ Expedited Settlement Women with Dow Corning breast
implants, as well as claims involving other Dow Corning medical
devices,



can choose this option to receive compensation quickly.



Option Two/ Medical Procedure Settlement Women with Dow
Corning breast implants who wish to have their implants removed
can choose this option



to pay for explantation, as well as additional surgical
procedures, should they be medically required. Women qualifying
for this option can use



it at any time until the year 2010 when the program



ends.



Option Three/ Rupture Settlement This option is available to
women who have already undergone surgery to remove a ruptured Dow
Corning



breast implant.



Option Four/ Qualified Medical Condition Settlement This
option is available to women with Dow Corning breast implants who
also have specific symptoms or



medical conditions. Qualifying for this option requires a
higher level of proof and more detailed



evaluation by the Settlement Trust according to set guidelines
and criteria. The types of symptoms, medical conditions and the
degree of disability determines the amount of compensation.



Payments for breast implant claims under all of the above
options increase based on the percentage voting for the plan,
from a "Base Amount" (if 67% vote "yes") to
an "Enhanced Amount" (80% vote "yes") or
"Extra Enhanced Amount" (92% vote "yes").



Litigation Trust



Women with breast implants, as well as others with Dow Corning
medical devices, who are not satisfied with any of the above
options, can vote against the new plan and, instead of settling,
sue the Litigation Trust. For those voting against the plan,
claims that breast implants cause disease will first be subject
to the binding verdict of a common issue causation trial to
resolve whether the claims are sufficiently supported by the
scientific evidence. Claims that remain after that trial will
first undergo individual claims review and mediation before
resorting to individual jury trials.



Number of Claims The number of estimated claims in each option
is based on actual claims filed in Dow Corning's case. No
additional claims can now be filed without individual court
approval. In addition, claims filed in the previous Global
Settlement have provided additional data in estimating the number
of claims likely to fall in each option.



Based on this data, Dow Corning's best estimate of the number
of claims is the following:



- U.S. claims for Dow Corning breast implants: 150,000



- Non-U.S. claims for Dow Corning breast implants: 50,000



- U.S. raw material breast implant claims..: 139,000



- Non-U.S. raw material breast implant claims..: 22,000



- U.S. claims involving other Dow Corning medical devices or
products: 15,500



-- Non-U.S. claims involving other Dow Corning medical devices
or products: 2,500.



..Denotes claims in which Dow Corning provided silicone gel to
other breast implant manufacturers.



WHAT'S NEXT



The next steps regarding this plan include:



- A hearing before U.S. Bankruptcy Judge Arthur Spector to
review and approve the Disclosure Statement, which describes the
plan in detail.



-- Mailing of the plan and Disclosure Statement to all
claimants. -- A solicitation period for voting on the plan. -- A
hearing to approve the plan. -- A common issue causation trial to
resolve the dispute regarding whether breast implants cause
disease. Only those women voting against the plan will be subject
to the finding of this trial. The trial will not affect those
voting for the plan.



Dow Corning estimates that the confirmation hearing could be
concluded by Judge Spector by the middle of 1998. Anyone who
intends to appeal confirmation of the plan will have 10 days to
do so following entry of the confirmation order. The confirmation
order becomes final after this 10-day period if no appeals are
filed, or after appeals are resolved. Once the confirmation order
becomes final, the plan will be implemented.



SOURCE Dow Corning Corporation /CONTACT: T. Michael Jackson,
517-496-6443, or Kevin Wiggins, 517-496-8835, both of Dow
Corning/