Fw: POST- UPDATED JUNE 18, 2002: Judge Hood Hearing, June 14, 2002

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Subject: POST- UPDATED JUNE 18, 2002: Judge Hood Hearing, June 14, 2002

Dianna Pendleton Counsel to the TCC DPEND440@... UPDATED JUNE 18, 2002: This is an update on the hearing before United States District Judge Page Hood on Friday, June 14, 2002 in Detroit. The hearing concerned objections and appeals filed by certain Nevada and Australian claimants and several pro se claimants (claimants who are representing themselves without an attorney). These objectors argued that the Dow Corning Settlement Plan could not legally release Dow Chemical, Corning and subsidiary companies of Dow Corning from liability for Dow Corning's breast implants. The objectors want the ability to collect money from Dow Corning in the Settlement Plan AND also be able to sue Dow Chemical and/or other related companies outside of the bankruptcy court proceedings. In January 2002, the 6th Circuit Court of Appeals addressed their objections and ruled that the release of liability of the non-debtor companies under a bankruptcy reorganization plan was permissible. In other words, the 6th Circuit court ruled that Dow Chemical and the other related companies could be released from liability for Dow Corning's breast implants as part of a reorganization of Dow Corning in bankruptcy. The 6th Circuit Court sent the case back to Judge Hood for further proceedings to determine if the trial record contained facts that support the release of liability in this case. Specifically, the 6th Circuit Court ordered the District Court Judge to determine if there were facts in evidence regarding: – whether there is evidence that Dow Corning and Dow Chemical for example have an identity of interests such that a lawsuit against Dow Chemical is, in essence, a lawsuit against Dow Corning or will deplete the assets of Dow Corning; -- whether Dow Chemical and the other non-debtor companies contributed substantial assets to the Settlement Plan in exchange for the release; -- whether the release of liability of Dow Chemical is essential to Dow Corning's ability to emerge from bankruptcy free of liability from claims by Dow Chemical; -- whether the Settlement Plan provides a way to make sure that the claimants affected by the release will be paid; and – whether the Settlement Plan provides an opportunity for claimants to litigate in court and be paid in full. Written briefs and objections on the "release" issue were submitted to Judge Hood earlier this year. The Tort Claimants Committee believes that the trial record has sufficient facts in evidence to justify the release of Dow Chemical and the other related companies in this case. The hearing on June 14th was to allow all parties to make any additional oral arguments regarding the release of liability issue. The release of Dow Chemical, Corning and the subsidiary companies is the ONLY issue left to resolve in the pending appeals. Judge Hood heard the oral arguments and indicated that she would like to move quickly in issuing a ruling. We do NOT know when she will issue her ruling. We will post any news or developments on this issue on the website. SETTLEMENT WITH U.S. GOVERNMENT ANNOUNCED AT THE HEARING During the June 14th hearing, the Tort Claimants Committee and Dow Corning announced that they had successfully negotiated a settlement with the United States Government. The U.S. Government informed the Court that it was in the process of obtaining final approval from the various federal agencies and hoped to have the necessary signatures within approximately 30-45 days. To recap, the U.S. Government filed claims in the bankruptcy alleging that it paid money to doctors and hospitals on behalf of women who had Dow Corning implant related treatment (such as removal of a Dow Corning breast or other type of implant or medical treatment for illnesses caused by Dow Corning implants). The U.S. Government sought to recover these types of medical expenses directly from Dow Corning under various Medicare recovery provisions. The U.S. Government has objected to the Settlement Plan since it was announced in 1998, and has filed appeals to the 6th Circuit Court of Appeals. The proposed settlement will settle and release from liability Dow Corning and all "Personal Injury Claimants" (i.e., persons who filed an implant-related claim) for any payments they receive from Dow Corning, the Settlement Facility or Litigation Facility. For claimants who filed an implant claim in the bankruptcy case and received Medicare or other type of medical assistance for your Dow Corning implants , this means that if you receive any money from the Dow Corning settlement plan – regardless of whether you settle your claim or litigate your case in court – you will NOT have to pay or repay any money to the U.S. Government for claims arising pursuant to Medicare Secondary Payer Statute or the Medical Care Recovery Act. EXAMPLE: If you received Medicare or Medicaid coverage (or medical coverage from the Department of Veteran Affairs, Department of Defense or Indian Health Services) for medical treatment related to your implant, AND you receive a payment from the Dow Corning Settlement Plan, then you will NOT be required to repay the U.S. Government back for those medical expenses. The proposed settlement releases claimants and Dow Corning from this obligation. If you do not receive any payments from the Dow Corning Settlement Plan, then the U.S. Government may still pursue you for reimbursement of any compensation you received from other implant companies for your Medicare medical expenses (i.e., you do not qualify to receive any money from the Dow Corning Settlement Plan but you received money from the MDL or from a settlement with one of the implant companies, then you are still responsible to reimburse the U.S. Government for any Medicare implant- related expenses). If you received Medicare or Medicaid coverage for a breast implant, you have a breast implant made by Dow Corning AND another breast implant made by someone else AND you receive any money from the settlement plan – regardless of whether you settle your claim or litigate your case in court – you will not have to pay or repay any money to the U.S. Government EXCEPT THAT the U.S. Government may assert a claim for any costs it incurred for paying for the removal of the non-Dow Corning breast implant. EXAMPLE: If you received Medicare or Medicaid coverage (or medical coverage from the Department of Veterans Affairs, Department of Defense or Indian Health Services) for medical treatment related to your implant, AND have a Dow Corning breast implant and an implant made by Bristol, AND you receive money from the Dow Corning settlement plan, then you will NOT be required to repay any of that money to the U.S. Government except for costs the U.S. Government incurred for removal of your non-Dow Corning breast implant. A hearing on the proposed settlement with the U.S. Government will be held on July 18th in Detroit. We will post all updates and developments on this website. Sincerely, Dianna Pendleton Counsel to the TCC