SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): May 15, 1995
DOW CORNING CORPORATION
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(Exact name of registrant as specified in its charter)
Michigan 1-7518 38-0495575
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(State or other (Commission (IRS Employer
jurisdiction of file number) Identification No.)
incorporation)
2200 West Salzburg Road, Midland, Michigan 48686-0994
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (517) 496-4000
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ITEM 3. OTHER EVENTS
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On May 15, 1995, Dow Corning Corporation commenced a case under Chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Eastern District of Michigan, Northern Division (Case No. 95-20512).
The Chapter 11 case is pending before U.S. Bankruptcy Court Judge Arthur J.
Spector and the Company continues in business as a debtor in possession.
The following is the text of a press release issued by Dow Corning
Corporation on May 15, 1995:
DOW CORNING VOLUNTARILY FILES FOR CHAPTER 11
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Midland, MI, May 15, 1995--Dow Corning Corporation today announced that
it has voluntarily filed for protection under Chapter 11 of the United States
Bankruptcy Code with the United States Bankruptcy Court in Bay City, Michigan.
In announcing today's Chapter 11 filing, Dow Corning's management
emphasized that its underlying business remains strong and that its customers
will not be directly affected by this action. "Dow Corning will continue to
supply products to our customers, and compensate our suppliers and employees
as we have in the past," explained Richard A. Hazleton, Dow Corning chairman
and chief executive officer. "We decided to take this action while we are in
a position of financial strength, with the cash to continue operating our
business without disruption.
"We now believe this is our only reasonable choice for four principal
reasons. First, attorneys with lawsuits outside of the global settlement have
not reduced their exorbitant demands, threatening our long-term business and,
therefore, our ability to fund the global settlement. Despite the scientific
evidence showing no link between implants and disease, we were faced with
preparing for nearly 200 cases in the next 6 months. This represented a
potentially enormous financial and management drain which threatened our
business. Our Chapter 11 filing immediately stops all lawsuits against the
company," Hazleton explained.
"Second, when we file our financial reorganization plan, we hope to
preserve our participation in a global settlement, to which we have agreed to
contribute $2 billion. Even so, we are concerned about the settlement, since
many are calling for hundreds of millions or even billions of more dollars and
are predicting thousands of additional lawsuits. We are continuing
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ITEM 3. OTHER EVENTS (Continued)
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discussions with global settlement attorneys to reach a satisfactory
agreement. But, we have consistently said that we cannot both fund the global
settlement and afford large numbers of lawsuits outside of the settlement,"
Hazleton said.
"Third, several recent credit rating downgrades have confirmed the
financial community's long-term concerns about the lack of a certain and
predictable financial resolution to this controversy. This understandable
concern is in spite of the underlying strength of our business, which the
ratings agencies understand. The Chapter 11 process will provide closure by
resolving all breast implant financial claims," Hazleton explained.
"Finally, some of our insurance carriers have not accepted their
responsibility to commit to pay their share of the more than $1.5 billion
which we believe they will owe us. As of March 31, 1995, we had received less
than $100 million. We believe we will eventually be reimbursed, but we are
not satisfied with our progress," Hazleton said.
"This was a difficult decision," explained Hazleton. "We carefully
considered what effect this would have on our customers, employees, suppliers,
and communities, as well as women who have our implants. In our judgment, the
current and evolving circumstances surrounding the breast implant controversy
reached the point that we had to take this action now to preserve both the
fundamental strength of our business operations and our ability to fairly
compensate all women with breast implant claims."
"We are disappointed that our efforts to resolve this controversy without
resorting to a Chapter 11 filing were not successful. We negotiated a $4.25
billion global settlement, including $2 billion funding from Dow Corning over
30 years. We argued our case in court with a good deal of success. We also
committed more than $30 million in additional research to address the
remaining questions women have about their implants, and we funded an implant
removal reimbursement program for women who wanted to have their implants
removed but lacked the financial means to do so," Hazleton said.
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ITEM 3. OTHER EVENTS (Continued)
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"Research has not shown a link between breast implants and the diseases
alleged in lawsuits. Research from prestigious institutions like Harvard
University, Mayo Clinic, Johns Hopkins, the University of Michigan and others
has consistently found that women with implants are no more likely to contract
disease than women without implants. In fact, recently, both the French and
British governments have reviewed the available research and concluded that
women with implants face no greater risk of developing autoimmune disease than
the general population," Hazleton stated.
"Our focus now will be to maintain our strong business momentum by
continuing to meet our customers' needs. We also intend to work closely with
our key creditors and the creditor committees once they are appointed to
complete our financial restructuring and emerge from Chapter 11 as soon as
possible, although the entire process will probably take two years or more.
We have started this process by filing motions today with the court that will
minimize any disruption to our normal day-to-day operations," Hazleton
explained.
"We at Dow Corning deeply appreciate the outstanding support we have
received from our customers, employees, suppliers, business and financial
partners, and communities throughout this controversy. We intend to
demonstrate that their confidence in us has been well placed by supplying
quality products and growing our business throughout and following this
Chapter 11 proceeding," Hazleton concluded.
Dow Corning Corp., a global leader in silicon-based materials, is a
Michigan corporation with shares equally owned by The Dow Chemical Co. and
Corning Inc. More than half of Dow Corning's sales are outside the U.S.
# # #
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DOW CORNING CORPORATION
Date: May 15, 1995 R. A. Hazleton
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R. A. Hazleton
Chairman and Chief Executive
Officer
Date: May 15, 1995 J. W. Churchfield
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J. W. Churchfield
Vice President for Planning and
Finance and Chief Financial
Officer
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