Creditors Could Take Dow Corning

Dow Corning Corp. could be forced to surrender the company to creditors, including women with its breast implants, under a bankruptcy reorganization plan by the creditors’ lawyers.

The plan would compete with Dow Corning’s own reorganization proposal, which could severely restrict the women’s ability to get damages from the company for making a product they contend is dangerous.

However, the creditors’ plan, which hasn’t been announced yet, could be endangered by a severe legal setback that implant recipients suffered in court.

A federal judge in Portland, Ore., ruled Tuesday that there is insufficient scientific evidence to prove implants cause disease. The ruling by U.S. District Judge Robert Jones bars women in about 70 Oregon cases from calling expert witnesses to back their claims.

Jones’ order involves three implant makers--but not Dow Corning--and isn’t binding on courts elsewhere. Nonetheless, he is the first judge to make such a ruling based on a panel of scientific experts gathered specifically for advice. Other judges have impaneled similar groups.

Jones’ ruling could be influential on U.S. Bankruptcy Judge Arthur Spector in Bay City, Mich., as he decides the best way to reorganize Dow Corning, legal experts said.

Dow Corning filed for bankruptcy in 1995 under the weight of 19,000 lawsuits alleging breast implants leaked and ruptured, causing pain and disfigurement and diseases such as rheumatoid arthritis and lupus that left women with severe mobility problems, fatigue and skin disorders.