Emergency Dalkon Fund Clears Hurdle

WASHINGTON —  A. H. Robins Co. has agreed to put $15 million into an emergency fund to pay for reconstructive surgery or in vitro fertilization for some women rendered infertile by the company’s Dalkon Shield intrauterine contraceptive device, lawyers in the case said Friday.

The agreement follows lengthy negotiations between the company and lawyers for the women over making a quick disbursement of funds to these women, who are approaching the end of the child-bearing years and need financial assistance from Robins to obtain treatment.

Robins filed for Chapter 11 protection under the U.S. Bankruptcy Code in Richmond, Va., nearly two years ago, seeking refuge from thousands of lawsuits filed by women alleging that they were harmed by the Dalkon Shield. Robins has since been negotiating a plan of reorganization, including a way to pay off these claims.

Under normal circumstances, funds would not be available to any Shield victims until after Robins emerges from bankruptcy law protection, which could be months--even years--away. But lawyers involved with the case say that would be too late for many women who are approaching age 40 to benefit from the procedures.

Under a proposal approved by major parties in the case, Robins would immediately set aside $15 million in an emergency fund, which should be enough to pay for surgery or in vitro fertilization for about 1,000 claimants, according to court papers. Any amount paid for this medical treatment would be deducted from the women’s ultimate payment under any reorganization plan.

Lawyers for Robins stockholders have filed objections to the emergency fund proposal, but sources said they expect the plan will be approved by U.S. District Judge Robert R. Merhige Jr., possibly at a hearing scheduled for today in Richmond.

“Money paid in the future is not going to mean as much to them as help now,” said Ralph R. Mabey, the court-appointed examiner, who helped draw up the proposal.

While the agreement with the plaintiffs is seen as a good public relations gesture for the company, sources said the company balked for some time at putting up the funds.

But James C. Roberts, an attorney for the company, said the plan “makes sense, both economically and from a point of view of humaneness.”

“Belated and modest though it is, a program that will benefit women who have been severely injured is always welcome,” said Murray Drabkin, counsel to the official committee representing Dalkon Shield victims.