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Settlement hearing begins between Dow Corning, women with implants

ESSEXVILLE, Mich. AP) -- A federal judge began hearings Monday on whether to approve a $3.2 billion settlement between Dow Corning Corp. and women who have had breast implants made with silicone from the company.

The hearing also covers $1.3 billion to settle other claims against the company. The hearing could last a month or longer.The company and lawyers for the women say the plan is the best compromise they could reach. They will face objections from the federal government, financial companies and some women. The opponents claim the plan gives them too little and protects Dow Corning and its corporate parents too much.

The hearing is being held in the auditorium of Garber High School in this town of 4,700 about 100 miles northwest of Detroit because it is the largest space near the bankruptcy court in Bay City that can handle an expected throng of lawyers and plaintiffs.

The settlement is the cornerstone of a $4.5 billion bankruptcy reorganization plan, which plots how Dow Corning will pay off about 570,000 creditors -- 170,000 of whom are women who sued. Among the other creditors are banks that hold Dow Corning's debt, insurance companies, doctors and hospitals.

The Midland-based company filed for bankruptcy in 1995 after 19,000 women sued, claiming silicone breast implants caused a variety of diseases. Under the proposed settlement, women who blame illnesses on Dow Corning silicone breast implants could get between $12,000 and $300,000 each. Women could also receive up to $25,000 for ruptured or leaking implants, and up to $5,000 for implant removal.

Women outside the United States would be paid 40 percent to 65 percent less for their claims, depending on where they live. Dow Corning said that was due to lower medical costs and different economic conditions in other countries.

And for those who reject the money and still want to sue, Dow Corning would set aside up to $400 million to cover any costs of defending such lawsuits.

Of the 112,774 women who voted on their settlement terms earlier this year, 94 percent approved.

Among those objecting are 49 women in Nevada and the estate of another. Their lawyers contend a clause shielding Dow Corning parent company Dow Chemical from any further lawsuits is unconstitutional.

A Nevada woman won a $4.2 million verdict against Dow Chemical last year, saying the company was liable for her health problems because it tested silicone products for Dow Corning in the 1960s. Her case, later settled, is the only one of its kind to be upheld so far.

Lawyers for the Nevada women say that gives them the right to pursue Dow Chemical in state court and likely win millon-dollar judgments.

The other major objection from individuals comes from women in the countries where payments are reduced 65 percent. Lawyers representing them say the payments should be larger.

Financial firms that hold $1.3 billion in Dow Corning debt voted against their part of the plan even though it pays them in full, saying the interest rate set by the company was wrong.

The U.S. Department of Justice has objected, saying the plan doesn't provide enough to pay for the health care the government has provided for people with silicone implants.