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Robins' Filing Was Inevitable, U.S. Judge Says : Plaintiffs Expected to Oppose Chapter 11 Plan

August 23, 1985|Associated Press

RICHMOND, Va. — U.S. District Judge Robert R. Merhige Jr. said Thursday that the petition of A. H. Robins Co. for reorganization under federal bankruptcy laws was appropriate and inevitable.

"I don't see how anything else could have been done," he said.

Merhige's comments came during a conference with attorneys involved in hundreds of lawsuits filed by women who claim they were injured by the Dalkon Shield intrauterine device manufactured and sold by Robins in the early 1970s.

More than 300 of the cases have been argued in Merhige's court in recent months. The litigation was immediately halted by Robins' bankruptcy petition.

The women claim that use of the Dalkon Shield led to pelvic infections, spontaneous abortions, sterility and, in some cases, even death.

Stock Stabilizes

Robins filed Wednesday for reorganization under Chapter 11 of the U.S. Bankruptcy Code, triggering a decline of $2.75 a share in Robins' stock before trading was suspended on the New York Stock Exchange.

It closed at $8 a share, but some over-the-counter trading was for as low as $5.50.

On Thursday, it closed at $8.375 a share on trading volume of 573,000 shares.

Lawyers for some Dalkon Shield plaintiffs were expected to file a petition in bankruptcy court asking that Robins' request be dismissed, but nothing had been filed by the time the court clerk's office closed Thursday.

Under a Chapter 11 bankruptcy proceeding, a business is allowed to continue operations while it works to resolve its financial problems under the supervision of the federal courts.

$378.3 Million in Payments

Robins, one of the nation's pharmaceutical giants, said that, as of June 30, the firm and its insurer have paid Dalkon Shield awards and settlements of $378.3 million to 9,230 women and have had legal and other expenses of $107.3 million.

The company said another 5,100 cases are pending and as many as 8,000 more are expected.

Attorneys on both sides said the matter probably won't be resolved for at least several years.

William Cogar, a Richmond attorney representing Robins, said the company has a considerable cash flow and is making money, but the Dalkon Shield suits are coming at such a pace that it is impossible to address them on a daily basis.

"If Robins can continue down through time with the same degree of profitability it enjoys, it's going to be able to discharge all its legitimate claims," he said.

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