NEW YORK – Dow Corning (search) said it emerged Tuesday from nine years in bankruptcy prompted by lawsuits filed by patients who claimed they were injured by silicone breast implants.
The Midland, Mich.-based maker of silicone breast implants and other medical implants using silicone said this month it will begin to process claims and pay the women who elect to settle them.
A U.S. bankruptcy court (search) judge in April set June 1 as the effective date for a multibillion-dollar settlement with 360,000 people set to receive checks shortly after that.
"At long last and much later than justice should ever allow, thousands of claimants will receive checks in the middle of the month," said Ralph Knowles, a member of Atlanta law firm Doffermyre Shields Canfield Knowles & Devine, who participated in negotiating the settlement.
Dow Corning, a joint venture between Dow Chemical Co. (DOW) and Corning Inc. (GLW), filed for Chapter 11 bankruptcy protection in 1995 following thousands of lawsuits that claimed the implants caused autoimmune diseases. The company denies silicone implants cause disease and cites scientific studies to support its claim.
Knowles said the bankruptcy delayed the process of getting funds to patients since the courts had to resolve competing claims on Dow Corning's assets.
"Although breast implants never represented more than 1 percent of our business, our company is often identified with them," Dow Corning Chairman Gary Anderson said in a statement.
Frank Mitsch, analyst at Fulcrum Global Partners, said Dow Corning is continuing to improve its results as the Asia's economies strengthen.
Dow Corning reported net income of $176.6 million in 2003 on $2.87 billion in sales.
"We are confident that the science shows a clear picture today, through more than 30 independent studies, government and court-appointed panels and numerous court decisions, that breast implants are not associated with disease. Nevertheless, we are pleased to be able to put this issue behind us."
The $2.35 billion trust is set to expire in 15 years and covers the removal of implants and treatment of autoimmune diseases that develop for women who received implants before 1994, said Sybil Nidel Goldrich, co-founder of implant advocacy group Command Trust Network.
Women who had implants after 1994 are presumed to have understood potential health risks, she said.
"The process was long and difficult, but we've got to put that behind us and make sure women have enough money to get their implants removed and get some closure on the issue," Goldrich said.
Dow Corning was profitable before filing for bankruptcy, but it was not the first profitable company to file for bankruptcy to shield itself from product liability claims.
Manville, an asbestos producer, spent six years in bankruptcy during the 1980s and established a trust to deal with litigation.