Dow Corning Exits Chapter 11 After 9 Years
Dow Corning Corp., a joint venture between Corning Inc. and Dow Chemical Co., emerged from bankruptcy protection Tuesday after nine years.
The Midland, Mich.-based company sought U.S. Bankruptcy Court protection from creditors in May 1995, reacting to thousands of personal- injury suits involving silicone-gel breast implants. Its Chapter 11 reorganization took longer than any such case -- 3,305 days.
Dow Corning’s bondholders, lenders and other creditors will receive full payment on the more than $1.2 billion they’re owed plus interest compounded during the company’s reorganization.
“Every purchaser of a bond or trade claim in Dow Corning’s bankruptcy just watched their money multiply over the years,” said Peter Chapman of Bankruptcy Creditors’ Service Inc. who holds $12,700 of trade claims against Dow Corning. “I am thrilled with the outcome.”
U.S. District Judge Denise Page Hood in Detroit ruled May 21 that lenders and bondholders would be paid at interest rates in their pre-bankruptcy agreement with the company. Hood’s approval of the request removed one of the remaining obstacles to the emergence of Dow Corning from bankruptcy proceedings.
In April, Hood approved a motion to let Dow Corning begin paying out a $2.3-billion settlement over 16 years on injury claims stemming from silicone-gel breast implants. The 1998 settlement was designed to compensate women injured by leaking breast implants.
Federal regulators banned sales of the implants in 1992 after researchers linked them to health problems. Studies have since cast doubt on links between silicone implants and ill health. Experts estimate that about 1 million women received the implants, of which Dow Corning had about 40% of the market.
“Although breast implants never represented more than 1% of our business, our company is often identified with them,” said Gary Anderson, Dow Corning’s chairman.
“We are pleased to be able to put this issue behind us.”
Shares of Midland-based Dow Chemical fell 30 cents to $39.60, and shares of Corning, based in Corning, N.Y., fell 14 cents to $12.25. Both trade on the New York Stock Exchange.
