Hundreds of Utahns who suffered bleeding, infertility and in some cases even death from the the Dalkon Shield IUD finally will be financially compensated.
A.H. Robins Company Inc., the manufacturer of such products as Robitussin, Dimetapp and Chap Stick, announced Friday the development of a trust. Notices offering immediate cash payment for injuries will be mailed to 764 Utahns and 196,000 others worldwide.Ralph R. Mabey, former U.S. bankruptcy judge for Utah and court-appointed examiner in the Robins Company Chapter 11 bankruptcy case in Richmond, Va., said Friday that the cash offers mark the first significant step in Robins' emergence from its bankruptcy filed over three years ago.
Since August 1986, the 44-year-old Bountiful resident has worked as a neutral party to supervise the conduct of Robins and to assist in effecting a successful reorganization of the company whose problems resulted from its manufacture between 1971-75, of over 4 million IUDs.
Mabey, managing partner of LeBoeuf, Lamb, Leiby & MacRae's Salt Lake office, explained that the mailing is made possible by the deposit of the first $100 million in the Dalkon Shield claimants trust.
"The trust will soon grow to a total of $2.35 billion cash plus $425 million in available insurance proceeds," he said.
Because of the presently limited funds, Mabey said the cash offers are in the amount of $725 for women who claim injury from the IUD, and $300 for spouses. Anyone who earlier filed a timely claim with the bankruptcy court can take advantage of this offer by making a minimal showing of Dalkon Shield use and injury.
Mabey said those women and other victims who choose not to accept the minimal cash offer will later be given the chance under the plan of reorganization to present evidence of their claims and to receive a cash settlement with the trust in an agreed upon amount which may well be much larger.
If no settlement can be reached, Dalkon Shield victims will be entitled to seek a jury verdict that would then be paid out of the trust funds.
The plan of reorganization results from what Mabey terms "the almost miraculous agreement between Robins and representatives of its creditor and Dalkon Shield plaintiffs groups after years of mistrust, acrimony and litigation." Nearly 95 percent of Dalkon Shield claimants who voted on the plan of reorganization approved it.
In the early 1970's, Robins, a Fortune 500 pharmaceutical company, distributed the Dalkon Shield intrauterine devices worldwide. Before filing Chapter 11 bankruptcy, Robins and its insurer paid out about $530 million to approximately 9,500 persons who claimed to be injured by the product.
Mabey said injuries included pain and bleeding, infertility, and - in a very few cases - even death.
Notwithstanding these settlements, there were another 6,000 lawsuits and claims against Robins when it sought the protection of the bankruptcy laws on Aug. 21, 1985.
Following the bankruptcy filing, the court ordered Robins to publicize worldwide the right of persons potentially injured by the device to file a claim with the court in Richmond. As a result of this publicity, nearly 200,000 claims are now pending. Robins' thus became one of the most complex cases in the nation.
Approximately a year after bankruptcy was filed, the federal court found that Robins was failing to comply with the bankruptcy laws and that a neutral examiner was needed in order to assure compliance with the law and to encourage a just resolution of the case.
Although he resides nearly 2,000 miles from the courthouse, Mabey was appointed based upon his expertise in the law and reputation for fair-mindedness. Mabey's decisions from the bankruptcy bench have been widely cited and the chief justice of the U.S. Supreme Court has appointed him to advise on amendments to the federal rules of bankruptcy procedure.
Dalkon Shield victims can obtain further information from the Dalkon Shield Claimants Trust by calling 1-800-451-1975.