The bankrupt A. H. Robins Co. moved yesterday to postpone for two months the deadline for filing a statement disclosing all the advance information its creditors need to assess the company's plan to reorganize under Chapter 11 and for filing the plan itself.
"The requested extension will not impair the rights of any party in interest," including women who claim to have been injured by the Dalkon Shield intrauterine contraceptive device, Robins' special bankruptcy counsel told U.S. District Judge Robert R. Merhige Jr.
Robins also said that an extension would give it "a fair chance" to resolve the question of how many of the approximately 300,000 notices of Dalkon Shield claims of harm are valid.
Merhige granted the company's request for an expedited hearing on Monday -- the current deadline for filing the disclosure statement and the reorganization plan. If the disclosure statement wins court approval, ballots will be sent to creditors for their acceptance or rejection. The present deadline for securing the votes of creditors on the plan is Aug. 29.
Robins wants Merhige to set Sept. 30 for filing the disclosure statement and the plan, and Nov. 30 for the return of creditors' ballots. If they accept the plan, a confirmation hearing would be held before it could become effective.
The judge, who has presided in the Bankruptcy Court case since Robins filed for voluntary bankruptcy Aug. 21, has expressed determination to start the flow of payment checks to valid Dalkon Shield claimants in September. But sources close to the case said privately that they expect the action no earlier than the end of the year.
Merhige has twice extended the deadlines because of numerous complications that have beset the bankruptcy proceedings, including, most recently, a government motion that led him to hold Robins in contempt of court. He is expected to impose sanctions for the contempt in a few weeks, but declined to name a trustee to run the company.
Robins said in the motion that, while it will be in a position to file a reorganization plan on Monday, it could not simultaneously file "a meaningful disclosure statement . . . because the number and dollar amount of Dalkon Shield claims will not and cannot be ascertained." The company also said it will propose by Monday a plan for estimating the cost of valid Shield claims.
The hearing is expected to produce opposition to delay by counsel for some creditors, who will argue that reorganization should proceed under a plan that assures Robins whatever profits it needs, while reserving excess assets for Dalkon Shield and other creditors. Robins had net income of about $145 million in 1985 and about $4.2 million in the first five months of 1986.
"We are not asking for delay for delay's sake, not by any stretch of the imagination," said Dennis J. Drebsky of the Robins law firm of Skadden, Arps, Slate, Meagher & Flom in New York. Asked if he foresees an ultimate payout to Dalkon Shield and other creditors of 100 cents on the dollar for valid claims, he said, "That's what we're going for."
Drebsky noted certain unresolved issues, such as punitive damages for more than 5,000 Dalkon Shield users who filed lawsuits before the bankruptcy, but that were frozen by the Chapter 11 filing.