Settlement Facility
, 1999
. TABLE OF CONTENTS
DEFINITIONS SFA - 1
Agreement SFA - 1
PURPOSE AND MANAGEMENT SFA - 2
3
of Liabilities SFA - 4
TRANSFER OF ASSETS SFA - 4
Settlement Fund SFA - 5
5
6
Fund SFA - 6
6
FACILITY ADMINISTRATION SFA - 6
6
Function SFA - 6
7
SFA - 7
Administrator SFA - 8
SFA - 8
9
Functions SFA - 9
Funds and Review of Claims Operations SFA - 11
Representatives and Claimants' Advisory Committee SFA - 12
Committee SFA - 12
13
Professionals SFA - 13
PRINCIPLES/REQUIREMENTS FOR RESOLUTION OF CLAIMS
OF SETTLING PERSONAL INJURY CLAIMANTS/IMPLEMENTATION
OF CLAIMS RESOLUTION PROCEDURES SFA - 14
Guidelines SFA - 14
Procedures SFA - 15
Administrator/Provision of Claims Data to Debtor
17
17
Procedures SFA - 18
18
SFA - 18
CLAIMS RESOLUTION OPTIONS/ELECTION PROCESS/ORDERING
18
19
Litigation SFA - 19
Payment Options SFA - 19
19
FUND ALLOCATION/PAYMENT DISTRIBUTION PROCEDURES/
COURT APPROVALS SFA - 20
Payments SFA - 20
20
20
SFA - 20
20
of the Settlement Fund and the Litigation Fund SFA - 20
21
21
21
21
Available for Distribution to Claimants
SFA - 21
22
22
SFA - 22
Facility SFA - 22
Facility SFA - 22
22
Settling Claims SFA - 23
23
Approvals SFA - 23
SFA - 23
to Litigation Fund for Payment of First Priority Payments SFA -
24
Amount SFA - 24
SFA - 25
Administrative Expenses SFA - 25
FINANCIAL MANAGEMENT SFA - 25
Payment SFA - 25
25
MISCELLANEOUS SFA - 28
28
GENERAL PROVISIONS SFA - 29
29
.
reorganization under chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the Eastern District of Michigan, Northern
Division.
resolution of certain Personal Injury Claims through a Settlement
Facility.
on ___________, [1999] (the "Confirmation Order"), the Plan was
confirmed.
this Agreement establishes the Settlement Facility, the purposes of
which are specified at Article II.
Confirmation Order, it is agreed as follows:
1.01 Incorporation of Definitions. All capitalized terms used in
this Agreement and not otherwise defined herein shall have the
meanings assigned in the Plan, Disclosure Statement, the Dow Corning
Settlement Program and Claims Resolution Procedures, the Funding
Payment Agreement, the Litigation Facility Agreement, and the
Bankruptcy Code — in that order. All definitions in the Plan,
Disclosure Statement, and Bankruptcy Code and the Dow Corning
Settlement Program and Claims Resolution Procedures are incorporated
herein by reference.
1.02 Original Global Breast Implant Settlement Agreement — means the
Agreement filed in the United States District Court for the Northern
District of Alabama on March 29, 1994 in the Case of Lindsey v. Dow
Corning, et al., Civ. Act. No. CV 94-P-11558-S (MDL 926).
1.03 MDL 926 Claims Administrator — means that individual appointed
by the MDL 926 Court to serve as the administrator of the MDL 926
Claims Office.
1.04 MDL 926 Claims Office — means the claims office established by
the MDL 926 Court to receive and process claims under the terms of the
Original Global Breast Implant Settlement Agreement and the Revised
Settlement Program.
1.05 MDL 926 — means the multi-district litigation captioned In re
Silicone Gel Breast Implants Products Liability Litigation
consolidated in the United States District Court for the Northern
District of Alabama pursuant to 28 U.S.C. § 1407 by order of the
Judicial Panel on Multi-District Litigation dated June 26, 1992.
1.06 MDL 926 Court — means the Judge and Court with jurisdiction over
MDL 926 and over the MDL 926 Claims Office (which MDL 926 Claims
Office shall be used to perform functions described herein).
Currently, United States District Judge Sam C. Pointer, Jr. presides
over MDL 926. For purposes of this Settlement Facility Agreement, in
the event that the current MDL 926 Judge is unable or unwilling to
perform the functions designated herein, all such functions shall be
performed by the District Court.
1.07 MDL Quality Control Office — means the Quality Control and
Computer Support Office employed by the MDL 926 Claims Office to
provide quality control and computer support.
1.08 Quality Control Supervisor — means the individual or entity
employed by the
Claims Office to establish procedures to assure accurate and
consistent application of Claim eligibility criteria and processing
protocols. This Quality Control Supervisor may be the same individual
or entity that is employed by the MDL 926 Claims Office to perform
data management and quality control functions.
1.09 Revised Settlement Program — means the Program established under
the jurisdiction of the MDL 926 Court in Order No. 27 (Civ. Act. No.
CV 94-P-11558-S, December 22, 1995) and as modified or amended by
subsequent Orders of the MDL 926 Court or procedures of the MDL 926
Claims Office.
1.10 Special Master — means the Special Master appointed by the
District Court under the terms of the Case Management Order and
Litigation Facility Agreement.
2.01 Purpose. The purposes of the Settlement Facility are: (i) to
assume liability for and to liquidate and resolve claims of Settling
Personal Injury Claimants and Settling Other Claimants and to pay
expenses and costs in accordance with the terms of the Plan and this
Agreement and the Dow Corning Settlement Program and Claims Resolution
Procedures ("Claims Resolution Procedures") (Annex A to this
Settlement Facility Agreement), subject to and without exceeding the
available assets of the Settlement Fund as set forth at Section 3.02;
(ii) to supervise the receipt, holding and investing of funds paid to
the Trust in accordance with the terms of the Funding Payment
Agreement and this Settlement Facility Agreement; (iii) to distribute
funds paid to the Settlement Facility to Claimants with Allowed Claims
and for administrative and other expenses in accordance with the terms
of the Funding Payment Agreement, the Litigation Facility Agreement,
and this Agreement; and (iv) to assure that the Trust qualifies as a
Qualified Settlement Fund pursuant to § 468B of the Internal Revenue
Code and the Treasury Regulation promulgated thereunder.
2.02 Management of Claims Resolution. The claims resolution
functions of the Settlement Facility shall be administered by a Claims
Administrator as described in Article IV. The Claims Administrator
shall exercise the powers and obligations set forth in this Settlement
Facility Agreement and shall assure the distribution of payments to
Claimants in accordance with the terms of this Agreement.
2.03 Allocation and Distribution of Funds. The distribution and
payment of funds to Settling Personal Injury Claimants and to
Claimants whose Claims are resolved by the Litigation Facility shall
be administered by the Claims Administrator and the Finance Committee
as defined herein.
2.04 Maintenance of Actions. As specified at Section 4.07, the
Finance Committee shall have the authority to file any action, suit,
or proceeding on behalf of the Settlement Facility or the Trust (as
defined below) or to enforce the obligations set forth in the Funding
Payment Agreement. The Finance Committee shall also defend and
arrange for the defense of any action, suit, or proceeding brought
against the Settlement Facility, the Trust, the Claims Administrator,
the Finance Committee, or any agent or employee of the Settlement
Facility.
2.05 Establishment of Depository Trust. To effectuate the terms of
this Agreement, a depository trust ("the Trust") shall be established
consistent with the provisions of this Section 2.05 and the Plan.
receive, hold, and invest funds in accordance with, and subject to,
the provisions of the Settlement Facility Agreement, the Funding
Payment Agreement and the Litigation Facility Agreement; (ii) to issue
payments and disburse funds at the direction of the Finance Committee
and as provided herein; and (iii) to qualify as a Qualified Settlement
Fund ("QSF") pursuant to Section 468B of the Internal Revenue Code and
the Treasury Regulations promulgated thereunder.
Settling Personal Injury Claimants whose Claims have been Allowed
under the terms of this Settlement Facility Agreement and all
Non-Settling Personal Injury Claimants whose Claims have been settled
by the Litigation Facility. Nothing in this provision is intended to
affect any rights of Settling and Non-Settling Personal Injury
Claimants under the Plan, the Settlement Facility Agreement, and/or
the Litigation Facility Agreement.
The Trustee shall be a [bank with a corporate trust department and net
assets of not less than $ ]. The Trustee shall act
only at the direction of the Finance Committee as specified herein and
shall take no action unless directed by the Finance Committee. The
Trustee may not assign its rights or obligations hereunder. The
Trustee may serve as the paying agent responsible for distribution of
payments, as specified at Section 7.02 herein. The Trustee shall be
entitled to receive a reasonable fee and reimbursement of reasonable
costs and expenses for its services hereunder, subject to Section
7.03(e) herein. It is intended that the costs and expenses of the
Trust and Trustee shall be minimal and consistent with the fees and
expenses incurred in the Revised Settlement Program for comparable
functions.
held harmless from liability under the Trust as long as the Trustee
acts in accordance with the directions of the Finance Committee.
sixty (60) days prior written notice to the Finance Committee, the
District Court, the MDL 926 Court, the Claimants' Advisory Committee,
and the Debtor's Representatives, provided, however, that the
resignation shall not become effective until a successor Trustee has
been appointed.
time by the Finance Committee, subject to approval of the District
Court.
removal of the Trustee, or in the event the separate corporate
existence of the Trustee terminates, a successor Trustee shall be
selected by the Finance Committee, subject to District Court approval.
All funds that are to be paid to the Settlement Facility pursuant to
the Plan Documents shall be paid to the Trust as depository.
Notwithstanding any contrary provision of applicable law, the Trustee
shall invest all funds that are deposited in the Trust as directed by
the Financial Advisor and the Finance Committee as approved by order
of the District Court. All funds that are to be paid by the
Settlement Facility pursuant to the Plan Documents shall be paid by
the Trust. All liabilities and obligations that are to be assumed by
the Settlement Facility pursuant to the Plan Documents shall be
assumed by the Trust but only to the extent that funds to be paid to
the Settlement Facility are available to satisfy the assumed
liabilities and obligations.
substantive law of the State of
[ ], subject, however, to the exclusive reservation of
jurisdiction in specific courts under the Plan and this Settlement
Facility Agreement.
created for the primary purpose of paying debts of the Debtor within
the meaning of Section 11 of the Michigan Revised Probate Code (MCLA §
700.11, MSA § 27.5011) and a Trust created in deposits in a banking
institution or savings and loan institution within the meaning of
Article 1 of New York's Estates, Powers & Trust Law (N.Y. Est. Powers
& Trust Law, § 1-2.20) and all matters relating to the validity and
interpretation of this Trust shall be under the exclusive jurisdiction
of the Court. In accordance with Section 8.7 of the Plan, all actions
involving the Trust shall be brought in the United States Bankruptcy
Court for the Eastern District of Michigan.
3.01 Source of Funds. The Debtor has executed and delivered a
Funding Payment Agreement and an Insurance Allocation Agreement.
Assets shall be transferred to the Settlement Facility in accordance
with the terms of the Funding Payment Agreement and the Insurance
Allocation Agreement. All assets received by the Settlement Facility
shall be administered, held and distributed in accordance with the
terms of this Agreement and the Funding Payment Agreement.
3.02 Allocation of Funds. The funds received under the terms of the
Funding Payment Agreement shall be distributed to Claimants and
allocated for administrative and other expenses and costs in
accordance with the terms of Articles III, V, and VII herein, the
Claims Resolution Procedures, and the Plan.
under the terms of the Funding Payment Agreement, an amount up to the
aggregate sum of $400 million Net Present Value shall be defined as
the "Litigation Fund." The aggregate amount paid to resolve all
Non-Settling Personal Injury Claims, Assumed Third Party Claims, Class
12 Claims, and, to the extent provided in the Litigation Facility
Agreement, Litigated Shareholder Claims, plus defense and
administrative costs associated with resolving Claims under the terms
of the Litigation Facility Agreement, including fees of the Special
Master and defense costs for the resolution of Claims in Classes 4A
and 11-17 (such defense costs and other costs and fees shall
collectively be defined for purposes of this Settlement Facility
Agreement as "Litigation Facility Expenses"), shall not exceed the
Litigation Fund. The assets comprising the Litigation Fund shall be
paid only if and as required to liquidate and resolve Claims subject
to resolution under the Litigation Facility Agreement and to pay
expenses of the Litigation Facility. The Litigation Fund shall be
reserved for the payment of Non-Settling Personal Injury Claims,
Assumed Third Party Claims, Claims of Claimants in Class 12, and, to
the extent provided in the Litigation Facility Agreement, Litigated
Shareholder Claims, and Litigation Facility Expenses, except that the
Litigation Fund may be accessed for purposes of payment of portions of
certain Claims of Settling Personal Injury Claimants Allowed under the
terms of this Agreement under the conditions outlined at Sections 7.01
and 7.03 below.
Settlement Facility under the terms of the Funding Payment Agreement,
and all earnings thereon, if any, except the Litigation Fund, shall be
defined as the "Settlement Fund." The Settlement Fund shall be
reserved for the resolution of Settling Personal Injury Claims and all
Other Claims not subject to the Litigation Fund and all costs and
administrative expenses of the Settlement Facility (not including
costs and expenses of the Litigation Facility) and shall not be used
or accessible for any other reason. Specifically, the Settlement Fund
shall be used for payment of the Allowed amount of Claims of Settling
Claimants in Classes 5-10, 6A, 6B, 6C, 6D and, to the extent provided
in the Litigation Facility Agreement, Litigated Shareholder Claims,
and for the Allowed amount of obligations described at Section 6.14.5
of the Plan, and for payment of the Allowed amount of Claims in
Classes 4A and 11-17 to the extent provided in the Plan and the
Litigation Facility Agreement. To the extent any such obligations are
paid directly by the Reorganized Dow Corning, as specified in the
Funding Payment Agreement and the Plan, such amount(s) shall be offset
against the amounts to be paid by the Reorganized Dow Corning to the
Settlement Facility, as provided in the Funding Payment Agreement.
The Claimants' Advisory Committee must consent to the settlement of
any Claim in Classes 11, 13, 14, 15, or 17 that is channeled to the
Litigation Facility for resolution and such consent shall not
unreasonably be withheld.
Fund is a subfund within the Settlement Fund. Such Fund defines the
maximum aggregate amount that may be paid to Settling Breast Implant
Claimants whose Claims are resolved under Disease Payment Option I and
who are eligible to receive payment for Increased Severity, as
specified at Annex A Section 6.02(d)(viii). The Increased Severity
Fund shall not exceed $15 million Net Present Value.
a subfund within the Settlement Fund. The sum of $36 million Net
Present Value shall be defined as the Other Products Fund. The
maximum amount payable to Settling Other Products Claimants shall not
exceed $36 million Net Present Value. Of the aggregate $36 million,
the sum of $6 million Net Present Value shall be defined as a "Premium
Payment" for purposes of priority of distribution under Section 7.01.
Silicone Material Claimants' Fund is a subfund within the Settlement
Fund. The sum of $57.5 million Net Present Value shall be defined as
the Silicone Material Claimants' Fund. The maximum amount payable to
Settling Silicone Material Claimants shall not exceed $57.5 million
Net Present Value.
3.03 Assumption of Liabilities/Payments. (i) The Settlement Facility
assumes and shall be exclusively liable for any and all liabilities,
present or future, whether such liabilities are liquidated,
non-liquidated, contingent or non-contingent asserted or un-asserted,
fixed or not fixed, matured or un-matured, disputed or un-disputed,
legal or equitable, known or unknown of Debtor now or hereafter
arising in connection with or relating to Claims of Settling Personal
Injury Claimants and Other Claims; (ii) The Reorganized Dow Corning
shall promptly take all appropriate action to transfer to the
Litigation Facility any lawsuit or action that may be or has been
filed against the Reorganized Dow Corning and that arises from any
Claim subject to the provisions of Section 8.4 of the Plan. The
Reorganized Dow Corning shall be reimbursed by the Settlement Facility
from the Litigation Fund for any reasonable expenses, costs, fees,
liabilities, or judgments arising out of or incurred in connection
with any such Claim provided that the Reorganized Dow Corning has
taken prompt action to transfer the Claim as described above. Nothing
in this provision shall be construed to limit or affect the
effectiveness or scope of the channeling injunction.
4.01 Court Supervision. The resolution of Claims under the terms of
this Settlement Facility Agreement and the Claims Resolution
Procedures and the functions in this Article IV (as specified in this
Article IV) and the functions in Articles V and VI herein shall be
supervised by the MDL 926 Court. The MDL 926 Court shall have the
authority to act in the event of disputes or questions regarding the
interpretation of Claim eligibility criteria or management of the
Claims Office. The District Court shall perform all functions
relating to the distribution of funds and all determinations regarding
the prioritization or availability of payments, specifically including
all functions related to Articles III, VII, and VIII herein, and any
functions not specifically designated to the MDL 926 Court.
4.02 Appointment of Claims Administrator.
Claims Administrator shall be . The Claims
Administrator shall be agreed upon by the Tort Claimants' Committee or
the Claimants' Advisory Committee and the Debtor or the Debtor's
Representatives, subject to approval of the MDL 926 Court, to perform
the functions herein. With respect to claims administration
functions, the Claims Administrator shall be supervised by the MDL 926
Court. The Claims Administrator shall be obligated by the terms of
the appointment to perform such functions and assume such obligations
and responsibilities as specified herein. In general, and as
specified more fully in this Settlement Facility Agreement and Annex A
to this Agreement, the Claims Administrator shall be responsible for:
(i) supervising processing of Claims resolved under the terms of this
Settlement Facility Agreement and the Claims Resolution Procedures and
overseeing all aspects of the Claims Office including the Quality
Control Supervisor and the Operations Manager, (ii) preparing and
distributing periodic reports documenting the activity of the Claims
Office, including detailed reports on Claims submissions and
resolutions, and (iii) as a member of the Finance Committee,
performing periodic analyses and estimates regarding the costs and
projected costs of processing and resolving Claims subject to the
terms of this Agreement and of the Litigation Facility Agreement and
any matter or contingency that could affect the sufficiency of funds
for payment of Allowed Claims. The Claims Administrator shall seek
the input and advice of the Claimants' Advisory Committee and the
Debtor's Representatives on all matters of mutual concern and as
specified at Section 5.05.
Claims Administrator resigns or is removed from office or is otherwise
unable to perform the functions of the Claims Administrator, a
successor Claims Administrator shall be selected by the Debtor's
Representatives and the Claimants' Advisory Committee, subject to
approval of the MDL 926 Court. If the Debtor's Representatives and
the Claimants' Advisory Committee are unable to agree on a successor
Claims Administrator, the Finance Committee shall propose a successor,
subject to the approval of the MDL 926 Court.
Administrator (or successor Claims Administrator) shall be (i) an
individual over the age of 35 whose experience and background are
appropriate for the responsibilities hereunder, and (ii) at the time
of appointment and at all times during the term of service,
independent. The Claimants' Advisory Committee and the Debtor's
Representatives may agree to waive certain qualification requirements.
For purposes of this Settlement Facility Agreement, a person is not
independent if such person:
representative of a holder of any Claim against the Debtor or any
other Released Party;
Claim against the Debtor or any Released Party such that the person's
impartiality in serving as a Claims Administrator could reasonably be
questioned;
interests held indirectly through publicly-traded mutual funds) in the
Debtor or any other Released Party;
employee or agent of the Debtor or any other Released Party or related
to any of the foregoing, or otherwise is or was an "insider," as
defined in the Bankruptcy Code, with respect to the Debtor or any
other Released Party;
accountant or attorney or related to any of the foregoing, for the
Debtor or any other Released Party, or an officer, director, employee
or agent of any person or entity that provides (or at any time since
January 1, 1990, has provided) investment banking, financial advice,
accounting or legal services to the Debtor or any other Released Party
or related to any of the foregoing;
(or at any time since January 1, 1990, has represented as an attorney,
agent or otherwise) any interest whatsoever adverse to the interests
of the Debtor or any other Released Party, of the holders of a class
of any Claims against the Debtor or any other Released Party, or of
the holders of any equity interests in the Debtor or any other
Released Party;
director, employee, consultant or agent of the holder of any Claim
against the Debtor or any other Released Party; or
an investment banker, financial advisor, accountant or attorney for
the holder of any Claim against the Debtor or any other Released
Party, or an officer, director, employee or agent of any person or
entity that provides or provided investment banking, financial advice,
accounting or legal services to the holder of any Claim against the
Debtor or any other Released Party.
the duration of the Settlement Facility, subject to death, resignation
or removal.
removed from office by the MDL 926 Court.
Administrator — or his or her delegate — shall have the power to hire
and shall hire and appoint such staff and other appropriate agents,
including the Quality Control Supervisor and/or any persons or
entities performing Claim audit functions under this Settlement
Facility Agreement, as necessary to carry out the functions of the
Claims Administrator under this Settlement Facility Agreement.
Salaries, fees, budgets, and payment terms for any staff, contractors,
or auditors shall be determined by the Finance Committee, subject to
the provisions of Section 7.03(e). The Claims Administrator shall not
have authority to subcontract claims-processing functions without the
consent of the Debtor's Representatives and the Claimants' Advisory
Committee and the approval of the MDL 926 Court. Subject to the
direction of the Finance Committee, which shall coordinate with the
MDL 926 Court as appropriate, and the approval of expenditures by the
District Court, the Trust shall have the authority to enter into such
contracts or agreements as may be necessary to operate the Claims
Office, to hire staff and contractors and/or to obtain services and
equipment and shall have the authority to serve all functions of an
employer.
for the Claims Administrator shall be established by the MDL 926 Court
using the compensation established for the MDL 926 Claims
Administrator as a guideline. In addition, the Claims Administrator
shall be reimbursed for his or her reasonable out-of-pocket expenses
incurred in the performance of his or her duties. All such
compensation and expenses shall be paid from the Settlement Fund. The
Trust will promptly reimburse the Claims Administrator for such
reasonable out-of-pocket expenses.
implementation of the Plan, the Debtor and the Tort Claimants'
Committee shall seek an order from the MDL 926 Court and/or the
District Court designating the actions of the Claims Administrator,
staff and agents in collecting, processing, evaluating and paying
Claims as judicial actions of the court protected, to the maximum
extent allowable by the law, by the doctrine of judicial immunity. If
the MDL 926 Court and/or the District Court do not enter such order,
then the Claims Administrator shall not be liable for his or her acts
or omissions or those of any agent or employee of the Settlement
Facility or the Claims Office unless the Claims Administrator acted
with gross negligence or willful misconduct with respect to the acts
or omissions or in the selection or retention of any such agent or
employee.
Administrator is or may be a party in any action, suit, or proceeding
by reason of the Claims Administrator being or having been a Claims
Administrator of the Settlement Facility, or by reason of the Claims
Administrator serving or having served in any capacity at the request
of and on behalf of the Settlement Facility, the Claims Administrator
shall be indemnified by the Settlement Facility against reasonable
expenses, costs and fees (including reasonable attorneys' fees),
judgments, awards, costs, amounts paid in settlement, and liabilities
of all kinds incurred by the Claims Administrator in connection with
or resulting from such action, suit, or proceeding, with respect to
the actions at issue, if he or she acted in good faith and in a manner
the Claims Administrator reasonably believed to be in or not opposed
to the best interests of the Settlement Facility.
are named in any action relating to their duties, then the Finance
Committee is authorized to retain counsel and arrange for payment of
reasonable expenses, costs and fees (including reasonable attorneys'
fees) incurred by or on behalf of the Settlement Facility, Claims
Administrator, staff, or agents in connection with any such action,
suit, or proceeding, provided the Claims Administrator agrees to
repay such amount if it shall be determined ultimately that the Claims
Administrator is not entitled to be indemnified by the Settlement
Facility.
after notice to the Debtor's Representatives and the Claimants'
Advisory Committee, the Claims Administrator may purchase and
maintain reasonable amounts and types of insurance, including
insurance on behalf of an individual who is or was a Claims
Administrator, employee, or agent of the Settlement Facility against
liability asserted against or incurred by such individual in that
capacity or arising from his or her status as a Claims Administrator,
employee, or agent.
4.03 Establishment of Claims Office/Claims-Processing Functions.
be reviewed, processed and resolved by the Claims Office, which shall
be administered by the Claims Administrator. As more specifically
described herein, the Claims Office shall operate using the
claims-processing staff, procedures, facilities, data management, and
quality control process of the MDL 926 Claims Office. It is expressly
intended that the Settling Breast Implant Claims shall be processed in
substantially the same manner in which claims filed with the MDL 926
Claims Office under the Revised Settlement Program are processed
except to the extent criteria or processing guidelines are modified by
this Settlement Facility Agreement or the Claims Resolution
Procedures, and that the Claims Office shall continue its operations
as they have been conducted under the Revised Settlement Program. The
Claims Administrator, the Claimants' Advisory Committee and the
Debtor's Representatives shall seek all necessary orders from the MDL
926 Court authorizing the use of the MDL Claims Office staff and
facilities and any other orders necessary to implement the provisions
of this Settlement Facility Agreement. The Claims Office staff and
facilities shall operate under the supervision of the MDL 926 Court.
The Finance Committee shall enter into such agreements as are
necessary and appropriate to arrange for payment for use of the MDL
926 Claims Office and to assure appropriate processing schedules. The
Settlement Facility shall pay the costs and expenses of the Claims
Office in accordance with the directives of the Finance Committee,
subject to approval of the MDL 926 Court and subject to the terms of
this Agreement.
shall be selected by the Claims Administrator, subject to input from
the Finance Committee, the Claimants' Advisory Committee and the
Debtor's Representatives and to the approval of the MDL 926 Court.
The Claims Operations Manager shall, subject to the review,
supervision and direction of the Claims Administrator, assume
responsibility for the management of staff and daily operations of the
Claims Office functions relating to or concerning the processing and
resolution of Claims.
4.04 Financial Advisor. The Finance Committee shall select a
Financial Advisor, which appointment shall be subject to the approval
of the District Court. The Financial Advisor shall be an individual,
institution or other entity with experience and expertise in financial
management and shall have primary responsibility for overseeing the
investment of all funds paid to and held by the Trust, for providing
investment instructions to the Trust, and for overseeing the
preparation of financial statements as specified at Sections 7.03(e)
and 8.04. The Financial Advisor shall also oversee, in conjunction
with the Finance Committee, the development of projected funding
requirements under Section 7.01(d) and the assessment of the
availability or adequacy of assets in the Litigation Fund and the
Settlement Fund for purposes of Section 7.03.
4.05 MDL 926 Claims Administrator. The MDL 926 Claims Administrator
may, subject to the approval of the MDL 926 Court, serve as a
consultant to the Claims Administrator, the Claims Office, and the MDL
926 Court to assist in the efficient and accurate operation of the
Settlement Facility. The Settlement Facility shall reimburse the MDL
926 Claims Administrator for such services at a rate or on a basis to
be determined by the MDL 926 Court. The Claims Administrator will
establish, in cooperation with the MDL 926 Claims Administrator, the
Claimants' Advisory Committee, and the Debtor's Representatives a
reasonable schedule for consultation with the MDL 926 Claims
Administrator. It is expressly intended that the MDL 926 Claims
Administrator is authorized to provide substantive guidance,
information and training to the Claims Administrator and the Claims
Operations Manager. It is also expressly intended that the Claims
Administrator and the Claims Operations Manager will seek the guidance
provided by the MDL 926 Claims Administrator and will adopt and abide
by the MDL 926 Claims Administrator's existing protocols regarding
processing methods and interpretation of the Disease eligibility
criteria for Breast Implant Claims (unless modified expressly by this
Settlement Facility Agreement or subsequently by written agreement of
the Claimants' Advisory Committee and the Debtor's Representatives) to
ensure consistent protocols as applicable.
4.06 Appeals Judge. The initial Appeals Judge shall be Frank
Andrews, the existing appeals officer appointed by the MDL 926 Court
to review and decide appeals from decisions of the MDL 926 Claims
Administrator. The Appeals Judge shall be approved by the MDL 926
Court. The Appeals Judge shall perform the functions as a member of
the Finance Committee as specified herein and as the Appeals Judge as
specified in the Claims Resolution Procedures. Any successor Appeals
Judge(s) shall be selected by the Claimants' Advisory Committee and
the Debtor's Representatives, subject to approval by the MDL 926 Court
for purposes of this Settlement Facility Agreement, and shall serve as
an officer of the court(s). If the Claimants' Advisory Committee and
the Debtor's Representatives are unable to agree on a successor
Appeals Judge, the Finance Committee shall select the successor,
subject to the approval of the MDL 926 Court. The Appeals Judge shall
be an attorney and shall satisfy the qualification criteria specified
for the Claims Administrator at Section 4.02(c). The Appeals Judge
shall be compensated at a reasonable rate established by the MDL 926
Court. The Appeals Judge will be reimbursed for any reasonable
out-of-pocket expenses incurred in the performance of the duties
described herein and in the Claims Resolution Procedures. All such
compensation and expenses shall be paid from the Settlement Fund. The
Appeals Judge may be removed by the MDL 926 Court.
4.07 Finance Committee.
composed of three members consisting of the individuals holding the
following positions: the Special Master, a single Appeals Judge (who
shall initially be Frank Andrews), and the Claims Administrator.
and Review of Claims Operations. Subject to the approval and
supervision of the District Court and as specified more fully in this
Settlement Facility Agreement, the Finance Committee shall (1) select
the Financial Advisor and any investment managers to oversee the
investment of the assets paid to the Settlement Facility under the
terms of the Funding Payment Agreement; (2) in conjunction with the
Financial Advisor, provide directions to the Trustee with respect to
investment and management of the assets paid to the Settlement
Facility; (3) in accordance with the provisions of Section 7.01,
conduct the analysis and projections necessary to determine the
availability of funds for payment of all categories of Claims; (4)
develop recommendations for submission to the District Court regarding
the release of funds payable from the Settlement Fund and the
Litigation Fund, as specified at Article VII herein; (5) review
proposed settlements of Non-Settling Personal Injury Claims to
determine the adequacy of funds for payments of such Claims and to
assure processing, litigation and resolution of Non-Settling Personal
Injury Claims within the allotted Litigation Fund; (6) develop
recommendations for submission to the District Court regarding the
necessity for deferrals or reductions in Claim payments; (7) as
specified herein, direct the paying agent to disburse payments for
Allowed Claims or for other purposes approved in accordance with this
Settlement Facility Agreement; and (8) recommend and establish
salaries, benefits, fees and expenses of the Settlement Facility and
Litigation Facility, as specified at Section 7.03(e). The Finance
Committee shall receive all reports and audits regarding Claims
resolution in the Settlement Facility and the Litigation Facility,
including results of quality control reviews and appeals, and may
request and arrange for any additional reports or reviews.
authority to hire and shall hire accountants, and auditors, along with
the Financial Advisor, as necessary, and shall have the authority to
hire such experts and consultants as necessary to prepare the
projections and analyses specified at Sections 5.03 and 7.01 and such
bankers and/or investment managers as may be necessary and
appropriate, subject to the approval of the District Court.
authority to bring actions on behalf of the Trust and the Settlement
Facility and to defend the Settlement Facility, the Trust, the Claims
Administrator, the Finance Committee, and any agents or employees of
the Settlement Facility and to hire counsel and pay reasonable fees in
connection with this authority, subject to the approval of the
District Court.
such general liability and other insurance as necessary and as
required by law with respect to the employees and staff performing the
claims administration functions.
schedule as necessary or as may be directed by the District Court or
the MDL 926 Court (but not less than once each quarter) to make
determinations required for the orderly and prompt payment of Allowed
Claims. Meetings may occur by teleconference or in person at the
discretion of the Committee.
majority vote.
Committee shall be compensated as provided herein from the Settlement
Fund. Specifically, the Claims Administrator shall be paid an annual
salary as determined in accordance with Section 4.02(f) and shall be
reimbursed for reasonable out-of-pocket expenses associated with
performing the duties of the Claims Administrator and acting as a
member of the Finance Committee. The Appeals Judge shall be
compensated at a reasonable rate established by the MDL 926 Court, as
specified at Section 4.06, and shall be reimbursed for reasonable
out-of-pocket expenses associated with performing duties as a member
of the Finance Committee. The Special Master shall be compensated at
a reasonable rate established by the MDL 926 Court for services
performed as a member of the Finance Committee and for reasonable
expenses associated with performing duties as a member of the Finance
Committee. Payment for compensation and expenses of the members of
the Finance Committee for services performed as members of the Finance
Committee shall be made from the Settlement Fund as specified at
Article VIII of this Settlement Facility Agreement.
and Claimants' Advisory Committee. The Debtor's Representatives and
Claimants' Advisory Committee shall attend and participate in
meetings of the Finance Committee, and the Finance Committee shall
consult with and seek the input and advice of the Debtor's
Representatives and Claimants' Advisory Committee.
4.08 Debtor's Representatives and Claimants' Advisory Committee.
Reorganized Dow Corning as appropriate shall appoint representatives
to perform all functions of the Debtor's Representatives as described
herein.
Master shall appoint a Claimants' Advisory Committee consisting of
three (3) members to fulfill the functions described herein and in the
Litigation Facility Agreement and the Funding Payment Agreement.
Notwithstanding this provision, if the Special Master reasonably
concludes that additional members of the Claimants' Advisory Committee
are necessary in order for the Claimants' Advisory Committee to
fulfill these duties, the Special Master has discretion to appoint up
to a total of five (5) members. No member of the Claimants' Advisory
Committee may be a bankruptcy lawyer.
Claimants' Advisory Committee shall attend and participate in meetings
of the Finance Committee as specified at Section 4.07.
Claimants' Advisory Committee shall be authorized to participate in
proceedings in the MDL 926 Court related to the functions, procedures
and operations of the MDL 926 Claims Office and the Revised Settlement
Program. The Tort Claimants' Committee or the Claimants' Advisory
Committee (as appropriate) and Dow Corning or the Reorganized Dow
Corning shall seek any necessary orders permitting the Debtor's
Representatives and the Claimants' Advisory Committee to participate
in such MDL proceedings.
Claimants' Advisory Committee shall be authorized to advise and assist
the Settlement Facility, the Claims Administrator, the Finance
Committee and the Litigation Facility regarding all matters of mutual
concern and as further specified herein or in the Litigation Facility
Agreement.
Claimants' Advisory Committee shall be provided with copies of all
reports, projections, motions, pleadings, or other similar documents
concerning the activities of the Settlement Facility.
the Debtor's Representatives may file a motion or take any other
appropriate actions to enforce or be heard in respect of the
obligations in the Plan, the Funding Payment Agreement, and the
Settlement Facility Agreement, including Annex A thereto.
Advisory Committee shall be compensated by the Settlement Facility at
reasonable hourly rates established by the MDL 926 Court. The
Settlement Facility will pay all reasonable out-of-pocket expenditures
of the Claimants' Advisory Committee.
>From time to time, if and when the Claimants' Advisory Committee
determines that it needs professional advice and assistance beyond the
expertise of the Claimants' Advisory Committee members, it may retain
professionals to perform specific tasks necessary for the Committee to
fulfill its duties and obligations under the Settlement Facility
Agreement, the Funding Payment Agreement, and the Plan Documents.
Except under extraordinary circumstances, the Claimants' Advisory
Committee shall submit a budget in advance of retention of the
professionals indicating the purpose of such retention as well as a
proposed budget specifying tasks, hourly rates, and total cost. If
the Reorganized Dow Corning agrees, then the reasonable fees of such
professionals shall be Fundable Expenditures and will be paid by the
Settlement Facility, subject to approval by the MDL 926 Court. In the
absence of agreement, the Claimants' Advisory Committee may apply to
the MDL 926 Court for authority to hire such professionals for the
purpose, time period and within the budget that the MDL 926 Court
determines to be appropriate and reasonable. Should extraordinary
circumstances arise which do not permit a budget to be submitted in
advance of the retention of professionals for the purposes and in the
manner outlined above, the Claimants' Advisory Committee shall
exercise its best efforts to budget the expenses and fees for the
retention of the professionals and submit them for approval as soon as
practicable, but in no event later than fourteen (14) days after the
retention of the professionals.
successor members of the Debtor's Representatives at its discretion.
Committee shall appoint a successor member upon the resignation or
death of one of its members.
4.09 Special Master. The Special Master shall serve as a member of
the Finance Committee, as specified at Section 4.07. At the request
of the Debtor's Representatives or the Claimants' Advisory Committee
and with the agreement of both the Debtor's Representatives and the
Claimants' Advisory Committee, the Special Master or Appeals Judge may
consult with and assist the Claims Administrator for the purpose of
ensuring and facilitating an efficient and fair operation of the
Settlement Facility consistent with the terms of this Settlement
Facility Agreement. The Special Master or Appeals Judge shall be
compensated at a reasonable rate established by the MDL 926 Court for
such services.
5.01 Claims Resolution Procedures/Eligibility Guidelines.
Injury Claims payable from the Settlement Fund in accordance with the
Claims Resolution Procedures outlined in Annex A. This Settlement
Facility Agreement and Annex A shall establish the exclusive criteria
for evaluating, liquidating, allowing and paying Claims, except as
modified in accordance with Sections 5.05 and 10.06. Claims that
satisfy the eligibility criteria specified in the Claims Resolution
Procedures shall be paid as specified at Section 7.02. Only those
Claims that satisfy the eligibility criteria specified in the Claims
Resolution Procedures as applicable are eligible to receive payment,
except to the extent that the Reorganized Dow Corning accepts Claims
through the individual Proof of Manufacturer Review or the Individual
Review Process for Rupture Claims, as specified at Section 6.02(e)(vi)
of the Claims Resolution Procedures, or otherwise. This Settlement
Facility Agreement and the annexed Claims Resolution Procedures
establish specific guidelines for submitting and processing Claims.
The Claims Administrator shall have discretion to implement such
additional procedures and routines as necessary to implement the
Claims Resolution Procedures consistent with the terms of this
Agreement and subject to the provisions of Section 5.05 of the
Settlement Facility Agreement.
procedures and staff training and shall develop claims-tracking and
payment systems as necessary to process the Settling Breast Implant
Claims in accordance with the terms of this Settlement Facility
Agreement and the Claims Resolution Procedures.
procedures, claims-processing protocols and staff training and shall
develop claims-tracking and analysis systems as are necessary to
process the Claims of Settling Other Products Claimants and Silicone
Material Claimants in accordance with the terms of the Claims
Resolution Procedures and subject to the provisions of Section 5.05 of
this Settlement Facility Agreement.
5.02 Maintenance of Claims Office Staff and Procedures. The Claims
Administrator shall oversee and supervise the Claims Operations
Manager and the Claims Office processing functions.
5.03 Reporting Functions of Claims Administrator/Provision of Claims
Data to Debtor.
Committee shall cause to be prepared and provided to the MDL 926
Court, the District Court, the Debtor's Representatives, the
Shareholders, and the Claimants' Advisory Committee reports
containing, at a minimum, a summary of Claims broken down as
appropriate by the categories of:
Claimants
Claimants
Claims and Non-Settling Personal Injury Claims submitted, reviewed and
approved for payment;
Settling Personal Injury Claims fall (both the condition asserted, as
applicable, and approved), including, at a minimum:
Claims,
Claims based on medical contraindication and their disposition,
Expedited Release Payment Option Claims,
Payment Option Claims (by Covered Condition, Disease Payment Option,
and severity level),
Condition Claims,
Explantation Payment Option Claims,
of First Priority Payments paid in the period and the number and
amount of Second Priority Payments paid in the period,
or subclaims where a review indicates that the distribution of
approved or minor deficiency Claims is substantially departing from
the rates in the Revised Settlement Program,
Implant Claimants requesting compensation under the Increased Severity
Fund and the amounts paid; the number of Claimants requesting
compensation for increased severity outside the Increased Severity
Fund and the amounts paid;
Non-Settling Personal Injury Claims by category;
Administrator, the Appeals Judge, and to Dow Corning under the
Individual Review Process for Rupture Claims, as specified at Annex A
Section 6.02(e)(vi), and the disposition of appeals;
category of Claim and type of deficiency;
and Non-Settling Personal Injury Claims and any information known
about the Claims;
with respect to Settling and Non-Settling Claims (in the aggregate,
not individually) from the Effective Date to the end of the period
covered by the report, and from the end of the prior month to the end
of the period covered by the report; and
manufacturers (Bristol, Baxter, 3M) and the number of such claims
subject to the fifty (50)-percent multiple manufacturer reduction.
District Court may request any additional reports. As soon as
practicable, and prior to the production of the first reports, the
Claims Administrator shall present a proposed format for the reporting
to the Claimants' Advisory Committee and the Debtor's Representatives
for their review and comment.
file with any court) records of all individual payments and
settlements concerning Claims. The Claims Office shall provide such
records to the Debtor's Representatives and the Claimants' Advisory
Committee in computer readable format. The records shall include the
dates of implantation, proof of manufacturer, the amount and date of
payments distributed and settlement options approved and denied. Such
records shall be redacted to preserve Claimant confidentiality.
and Shareholders along with their Insurers shall at their request and
expense, and pursuant to procedures approved by the Claims Office, be
afforded access to and permitted to inspect all documentation and
other supporting evidence submitted by any Settling Claimants who have
been paid as may be necessary for the Debtor and the Shareholders to
receive benefits under insurance policies. The Reorganized Dow
Corning, Shareholders, and Insurers shall maintain the confidentiality
of the Claims information to protect the identity of the Claimants.
5.04 Quality Control and Audit Procedures.
Operations Manager shall have the authority and obligation to
institute claim-auditing procedures and other procedures designed to
detect and prevent the payment of fraudulent Claims. To the extent
applicable, it is intended that the Claims Administrator will apply
and maintain any procedures established by the MDL 926 Claims
Administrator to detect fraudulent claims. Nothing herein is intended
to limit the authority of the Claims Administrator to institute other
appropriate procedures.
must be signed under penalties of perjury. The submission of
fraudulent Claims will violate the criminal laws of the United States
including the criminal provisions applicable to Bankruptcy Crimes, 18
U.S.C. § 152, and subject those responsible to criminal prosecution in
the federal courts.
institute proceedings for appropriate review and relief in the event
of fraud or abuse of the Claims Resolution Procedures. If any review
supports a finding of intentional abuse of the Claims Resolution
Procedures or fraud, the Claims Administrator shall deny the Claim.
shall have authority to enforce these provisions as appropriate.
Administrator shall have the plenary authority and obligation to
institute procedures to assure an acceptable level of reliability and
quality control of Claims and to assure that payment is distributed
only for Claims that satisfy the Claims Resolution Procedures. Such
procedures shall include the authority to require (as a condition to
payment of a Claim) the examination of a Claimant, or the review of a
Claim, by a physician selected by the Claims Office or to require
additional laboratory testing of the Claimant conducted by a
laboratory selected by the Claims Office. The Claims Office shall
bear the expense of any such examination or testing conducted at the
request of the Claims Office. Such procedures shall include the
authority to obtain independent operation audits.
Administrator shall maintain a Quality Control Supervisor. The
Quality Control Supervisor shall institute procedures to evaluate the
claims-processing functions to assure that Claims are processed
accurately and in accordance with the Claims Resolution Procedures.
The Quality Control Supervisor may, to the extent applicable, use
procedures applied in the Revised Settlement Program to assure
appropriate quality control. The Quality Control Supervisor may
simultaneously be employed by the MDL Claims Office. The Quality
Control Supervisor may, with the approval of the Finance Committee,
employ independent auditors to review Claims operations. The
Claimants' Advisory Committee and the Debtor's Representatives may
participate in a joint training session for the purpose of
implementing procedures and guidelines in the Dow Corning Settlement
Program.
The Claims Administrator shall institute mechanisms and shall cause
the Quality Control Supervisor to develop and maintain procedures to
assure that all procedures and claims-processing protocols applied by
the MDL 926 Claims Office with respect to the Revised Settlement
Program are applied by the Claims Office with respect to the Breast
Implant Claims except to the extent modified by this Settlement
Facility Agreement and the Claims Resolution Procedures.
accuracy of claims-processing functions, the Claims Administrator
shall have prepared periodic quality control/operations audits
conducted by an internal Quality Control Supervisor and by outside
auditors. The audits shall be designed to evaluate the accuracy and
consistency of application of the eligibility criteria, the accuracy
of Claims payments, including review of supporting documentation.
conducted, by an independent auditor, random audits to verify evidence
and supporting documentation (including medical records and medical
evidence) submitted by randomly-selected Claimants in connection with
the Claims Resolution Procedures and may audit individual Claims, or
groups of Claims.
5.05 Interpretation of Criteria/Consent of Parties. The Claims
Administrator shall obtain the consent of the Debtor's Representatives
and Claimants' Advisory Committee regarding the interpretation of
substantive eligibility criteria and the designation of categories of
deficiencies in Claim submissions (to the extent such interpretations
and designations have not previously been addressed by the MDL 926
Claims Administrator in connection with the Revised Settlement
Program). The Claims Administrator shall consult with and obtain the
advice and consent of the Claimants' Advisory Committee and the
Debtor's Representatives regarding any additions or modifications to
guidelines for the submission of Claims. In the event of a dispute
between the Debtor's Representatives and the Claimants' Advisory
Committee, the Claims Administrator may determine the issue or apply
to the MDL 926 Court for consideration of the matter. There shall be
no modification of any substantive eligibility criteria specified
herein or in Annex A through the appeals process or otherwise, except
as expressly provided in this Section 5.05 and in Section 10.06
herein.
6.01 Settlement Payment Options Defined.
options for resolving Claims subject to the terms and conditions of
this Agreement and the Claims Resolution Procedures. Allowed Claims
will be paid in accordance with the applicable compensation level
described in the Claims Resolution Procedures and subject to the terms
of this Agreement.
Implant Claimants may select up to three compensation options. All
Settling Breast Implant Claimants are eligible to receive (subject to
the qualification criteria): (a) a one-time Explantation Payment, (b)
a one-time Rupture Payment, and (c) either (i) a payment for an
eligible Covered Condition (under the Disease Payment Option) OR (ii)
an Expedited Release Payment. Breast Implant Claimants with Allowed
Claims who receive payment under the Disease Payment Option shall be
entitled to apply for an additional payment under the applicable
Disease Compensation Schedule as defined in the Claims Resolution
Procedures. Allowed Claims for Rupture and Disease may also receive a
Premium Payment if the District Court determines that sufficient funds
are available to make such payment consistent with the terms of this
Agreement.
Products Claimants are eligible for two separate compensation options,
each of which is mutually exclusive: (a) the Expedited Release
Payment Option OR (b) the Medical Condition Payment Option. The
eligibility criteria and documentation required to qualify for each of
these compensation options are specified in the Claims Resolution
Procedures.
Material Claimants are eligible for the Silicone Material Claimant
Payment Option. The eligibility criteria and documentation required
to qualify for this settlement option are specified in the Claims
Resolution Procedures. Breast Implant Claimants and Other Products
Claimants are not eligible to receive compensation under the Silicone
Material Claimant Payment Option.
6.02 Election Process: Right to Elect Settlement or Litigation. All
Personal Injury Claimants are permitted under the Plan to elect to
settle their Claims under the terms of this Agreement or to litigate
their Claims under the terms of the Litigation Facility Agreement. The
procedures for electing to settle or litigate are specified in the
Claims Resolution Procedures.
6.03 Submission of Claims Forms/Selecting Settlement Payment Options.
In accordance with the Claims Resolution Procedures, the Claims Office
shall distribute to Personal Injury Claimants Claim Forms by which
Claimants can elect one or more settlement options.
6.04 Resolution of Claims. The Claims Administrator shall determine
whether the Claims are eligible based on the eligibility criteria set
forth in Annex A and shall process the Claims according to the terms
and conditions set forth in Annex A.
6.05 Payment of Claims/Execution of Releases. If the Claim qualifies
for payment under the selected settlement option, the Claims Office
shall provide to the Claimant a Notification of Status letter
specifying the settlement amount for which the Claimant qualifies, as
more specifically described in the Claims Resolution Procedures. If
the Claimant qualifies for and accepts the Allowed payment amount, the
Claims Office shall authorize the Claim for payment. Payments shall
be distributed in accordance with the terms of Article VII. The
payment draft or check shall be printed on a document that specifies
and clearly advises the Claimant that endorsement and cashing of the
check or draft shall be deemed to serve as additional documentation of
the release of the Debtor and the Released Parties, as specified at
Section 8.3 of the Plan, and, further, of the release of the
Settlement Facility for any and all Claims or liability. The
Settlement Facility shall retain all canceled checks and shall provide
them (or copies) to the Reorganized Dow Corning and/or the
Shareholders upon request if required in connection with any claim or
action involving the Reorganized Dow Corning or Shareholders,
including, but not limited to, any proceedings involving Insurers.
The Reorganized Dow Corning and Shareholders shall, to the extent
possible, maintain the confidentiality of the Claimants.
7.01 Timing of Disbursements/Prioritization of Payments.
identified on the Settlement Grid, Annex B hereto, as Expedited
Release Payments (for both Settling Breast Implant and Other Products
Claims), Explantation Payments, Disease Base Payments (for Breast
Implant Claims), Rupture Base Payments (for Breast Implant Claims),
Medical Condition Payments for Other Products, and Silicone Material
Payments, along with related administrative costs, are defined as
"First Priority Payments." Payments to be distributed to or for the
benefit of Allowed Claims of Settling Claimants in Classes 4A, 6A, 6B,
6C and 6D, Classes 14 and 15, and, to the extent provided in the
Litigation Facility Agreement, Litigated Shareholder Claims shall also
be defined as First Priority Payments.
Payments for Allowed Claims in Classes 11, 13, 14A and 17 along with
related administrative costs shall be defined as Settlement Fund Other
Payments.
on the Settlement Grid as "Premium Payments" for Breast Implant
Disease Payment Option Claims and Rupture Payment Option Claims and
for Other Products Claims and payments for increased severity of
disease or disability under the Breast Implant Disease Payment Option
(for both Disease Payment Option I and Disease Payment Option II) as
outlined shall be defined as Second Priority Payments. Payments made
to Class 16 Claimants in respect of the obligations in Section 6.14.5
of the Plan that are to be paid by the Settlement Facility shall also
be defined as Second Priority Payments.
distributed to Non-Settling Personal Injury Claims, Allowed Claims of
Claimants in Class 12, Assumed Third Party Claims, and, to the extent
provided in the Litigation Facility Agreement, Litigated Shareholder
Claims along with Litigation Facility Expenses shall be defined as
"Litigation Payments."
Settlement Fund and the Litigation Fund.
in accordance with the terms of this Agreement and the guidelines
specified at Section 7.03 regarding the prioritization of payments.
Second Priority Payments shall only be made as specified at Section
7.01(c) and/or Section 7.03(a).
in accordance with the terms of the Litigation Facility Agreement and
the Case Management Order. The Litigation Fund shall be used solely
for the payment of Litigation Payments (as defined herein), except
that the Litigation Fund may be used to pay First Priority Payments
under the conditions set forth at Section 7.03(b).
and Litigation Fund shall not exceed the aggregate amount of each such
Fund as defined herein.
payment are subject to reduction if necessary to assure payment in
full of First Priority Payments (subject to the limits of the
Settlement Fund and the Litigation Fund). The Settlement Fund and the
Litigation Fund shall be distributed in accordance with the priorities
stated below.
Administrator shall distribute First Priority Payments in respect of
Allowed Claims as soon as reasonably practicable following approval.
Payments shall be paid solely from the amount defined as the
Litigation Fund and shall not in the aggregate exceed the Litigation
Fund. Litigation Payments are subject to deferral or reduction in the
event that the District Court determines, after submission of a
recommendation and findings of the Finance Committee, that payment of
all Allowed or allowable Non-Settling Personal Injury Claims would
exceed the aggregate amount of the Litigation Fund.
Payments shall be deemed "Second Priority Payments." Premium Payments
may not be distributed unless and until the District Court determines
that all other Allowed and allowable Claims, including Claims subject
to resolution under the terms of the Litigation Facility Agreement,
have either been paid or adequate provision has been made to assure
such payments.
interpreted as limiting the discretion of the Finance Committee with
the approval of the District Court to pay lower priority payments and
higher priority payments contemporaneously, so long as the ability to
make timely payments of higher priority claims is reasonably assured.
Distribution to Claimants.
Finance Committee shall, commencing the first quarter after the
conclusion of the opt-out process and on a quarterly basis thereafter
or at the request of the MDL 926 Court or the District Court, prepare
projections of the likely amount of funds required to pay in full all
pending, previously Allowed but unpaid and projected future First
Priority Payments. Such projections shall, to the extent known or
knowable, be based upon and take into account all data (as of the date
of the analysis) regarding (i) the number of Claims filed with the
Settlement Facility, (ii) the rate of Claim filings in the Settlement
Facility, (iii) the average resolution cost of Claims in the
Settlement Facility, (iv) the pending Claims in the Settlement
Facility, and (v) projected future filings with the Settlement
Facility. Such projections shall also state the anticipated time
period for the resolution and payment of such Claims.
months of the operation of the Settlement Facility may take into
account, in addition to the above, the claims resolution experience of
the MDL 926 Claims Office. These projections are not a pre-requisite
to paying First Priority Payments, and nothing in this subsection is
intended to delay the payment of First Priority Payments in respect of
Allowed Claims.
Committee shall, at the request of the Manager or the District Court,
and in any event no less than quarterly, commencing the first quarter
after conclusion of the opt-out process, prepare projections of the
likely amount of funds required in order to pay all Claims and
expenses subject to
be based upon and take into account all data regarding (i) Claims paid
from the Litigation Fund, (ii) expenses incurred,
Claims certified or likely to be certified for trial, (v) past and
projected costs of litigating claims certified for trial and (vi) past
and projected future resolution costs of Claims in pre-trial
settlements. On the basis of such projections, the Finance Committee
shall state the funds projected to be available for the payment of
unpaid Claims subject to the Litigation Fund ("Available Litigation
Funds") taking into account any projected need to access the
Litigation Fund for purposes of payment of First Priority Payments
pursuant to Section 7.03(b). The projection shall also state the
estimated time period for the resolution of such Claims.
projections described above in subparagraphs (d)(i) and (d)(ii) shall
be provided to the MDL 926 Court, the District Court, the Debtor's
Representatives, the Shareholders, and the Claimants' Advisory
Committee.
7.02 Distribution to Claimants.
First Priority Payments shall be distributed as soon as practicable
after approval of the Allowed Claim. The MDL 926 Court may supervise
the coordination between the Claims Office and the paying agent with
respect to distributions to Allowed Settling Personal Injury
Claimants.
The Litigation Facility Manager shall on a monthly basis notify the
Finance Committee of the Allowed amount of Claims resolved by the
Litigation Facility. The Finance Committee shall direct the paying
agent to distribute payments for Allowed Claims resolved by the
Litigation Facility, subject to the provisions of Section
7.01(b)(iii), and shall establish procedures to assure verification of
and appropriate accounting for such payments.
Committee may designate the Trustee as paying agent. The paying agent
shall arrange for the distribution of payments to Claimants upon the
direction of the Finance Committee and the District Court and in
accordance with the terms of this Settlement Facility Agreement and
the Funding Payment Agreement. The timing of all distributions shall
be determined by the Claims Administrator. The Finance Committee
shall have the authority to seek orders from the District Court
generally authorizing distributions of First Priority Payments without
separate orders regarding each such distribution and establishing
procedures for distributing payments involving liens or disputed
payees.
Claims. The Finance Committee is responsible for establishing
procedures to verify the Allowed amount of each Claim certified for
payment so that the correct payments are issued.
Administrator shall adjust the Allowed amount to deduct the amount of
any p