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JUDGE OUSTS CLAIMANTS' LAWYERS IN DOW BREAST IMPLANT LAWSUIT.

Byline: Tamar Lewin The New York Times

In a stunning blow to the lawyers handling breast-implant injury claims against Dow Corning Corp., the judge overseeing the company's bankruptcy proceedings has ordered that the attorneys negotiating on behalf of women with implants be replaced with a new negotiating committee, made up of the women themselves.

The ruling could slow down the 10-month-old bankruptcy case in which Dow Corning is seeking to resolve hundreds of thousands of claims by women who say they were injured by silicone breast implants manufactured by the company. The company also seeks to resolve damage claims arising from silicone in products like joint, penile or chin implants.

The opinion of U.S. Bankruptcy Judge Arthur J. Spector, handed down Thursday in Michigan, sharply criticizes the lawyers' role in the bankruptcy, contending that their negotiations are inherently rife with conflicts of interest.

Two lawyers on the committee said the decision would be appealed.

Dow Corning went into Chapter 11 proceedings May 15, 1995, following the lead of other companies that have used the protection of bankruptcy court to avoid an avalanche of product liability litigation, such as the asbestos claims that overwhelmed Manville Corp. and the Dalkon Shield claims against A.H. Robins.

The history of breast implant litigation has been especially convoluted. About 430,000 women have filed claims against different companies, arguing that silicone leaking from implants has caused ailments like rheumatoid arthritis, lupus and scleroderma. But several recent studies have found little, if any, health risk from breast implants.

In 1993, the implant manufacturers offered to settle the claims for $4.25 billion. Dow Corning, the leading manufacturer, was to contribute $2 billion. That agreement collapsed because the number of claims was greater than expected - less money than planned for each woman.

But last year, six months after Dow Corning got Chapter 11 protection from bankruptcy court, three other manufacturers reached a proposed settlement of the breast implant cases consolidated before a federal judge in Alabama. Notice of the proposed settlement has gone out to the claimants. Exactly how much the companies will pay depends on how many women participate, but value of the settlement is estimated at $2 billion to $3 billion.

Lawyers involved in the bankruptcy proceedings said that Dow Corning is now offering only $188 million to settle the claims against it.

Under Chapter 11, Dow Corning is trying to negotiate a reorganization, which would include a settlement of the implant claims. Two creditors' committees were appointed by the bankruptcy trustee: one for creditors like vendors, and the other for people with implant claims.

The implant claimants' committee was made up of Sybil Niden Goldrich, a California breast-implant recipient and founder of a support group for women with implants, and eight lawyers. Spector ordered the trustee to appoint a new committee.

The judge said the original committee was improper because federal bankruptcy law requires the trustee to appoint one or more committees of "creditors holding unsecured claims" to negotiate a reorganization plan.

"The eight attorney members are not 'creditors holding unsecured claims' because none of them holds a claim," he wrote.

Spector called it "unusual and unfortunate" to dissolve the original committee so many months into the case, but offered no explanation for why he had waited to act.
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Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Mar 23, 1996
Words:547
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