Robins Proposes $1.75-Billion Fund for Dalkon Victims
Beleaguered A. H. Robins Co., maker of the Dalkon Shield intrauterine device, filed a financial reorganization plan Thursday that sets up a $1.75-billion trust fund to pay women who claim to have been injured by the shield.
However, quick payment of claims and resolution of Robins’ nearly 2-year-old bankruptcy proceedings appeared clouded by disclosures that Rorer Group--the pharmaceutical company that makes Maalox--was seeking to acquire Robins, which is based in Richmond, Va.
In addition, lawyers representing some of the women claimants expressed reservations about the trust fund. The company said it would contribute $75 million to the fund from its cash on hand and issue public and private promissory notes. The balance would be covered by a letter of credit from a syndicate of banks headed by Manufacturers Hanover Trust, Robins spokesman Roscoe E. Pucket Jr. said.
“I think it’s an unfair plan because it sets an upper limit on what Robins will pay and makes the claimants pay the risk of underfunding” the trust fund, said Stanley K. Joyner III, whose Richmond, Va., law firm represents potential Dalkon Shield claimants.
Another claimant’s lawyer, Murray Drabkin, told United Press International on Thursday that while he was pleased with the dollar amount, he was concerned that it was not a cash fund. “This is a promise, a piece of paper that says the claimants will be paid over time,” Drabkin said.
Before filing for Chapter 11 protection, Robins paid more than $378 million to settle 9,230 suits filed by women claiming injury from the Dalkon Shield, which was taken off the U.S. market in 1974. An additional 5,000 claims were pending against Robins when it sought protection Aug. 25, 1985, under Chapter 11 of the U.S. Bankruptcy Code.
Since then, a campaign ordered by the federal bankruptcy judge solicited additional claims from women who suspected that they may have been injured. More than 320,000 responses were received by the April 30, 1986, deadline, although not all of the claims will be accepted as valid.
The claims, which have been filed from women in some 80 countries, including the United States, allege injuries that include defective births, infertility and even death.
As Robins has moved toward a reorganization plan, it has attracted takeover interest from rival pharmaceutical companies. In February, for instance, the company discussed a $1.75-billion buyout offer proposed by American Home Products. But negotiations fell through.
On Thursday, Rorer and Robins acknowledged that they had discussions in late March regarding a combination of the two firms but said no agreements were reached. While Rorer, based in Fort Washington, Pa., says it continues to be interested in a merger, Pucket said “we are proceeding with our reorganization plan.”
