The A.H. Robins Co. proposal explaining its financial reorganization plan "fails miserably" to meet requirements of bankruptcy law or to treat fairly women injured by the Dalkon Shield, the committee representing victims of the intrauterine contraceptive device charged yesterday.

The proposal is intended to be virtually the sole source of information on issues of vital concern to the IUD victims, such as whether their claims will be paid in full, when they will be paid, and what they must do to get their money, the Dalkon Shield Claimants' Committee said. But the committee said the document denies them "complete and unbiased disclosure" on such issues, and urged U.S. District Judge Robert R. Merhige Jr., who is presiding in the bankruptcy case, to reject it.

Under the bankruptcy code, the disclosure statement must -- in plain language -- explain a proposed reorganization plan, warn creditors of the risks they face, and alert them to any rights they may be asked to give up. Not until Merhige approves the disclosure statement, either in original or revised form, can the reorganization plan be moved toward confirmation or rejection by the creditors, who are primarily shield victims.

The statement, filed on Aug. 21, the second anniversary of Robins' resort to Chapter 11, reflects the pending $2.65 billion merger into Rorer Group Inc. On Nov. 5, Merhige will open a hearing on the legal adequacy of the statement and on the how much money shield victims should receive.

The chief executive officers of the two drug companies -- E. Claiborne Robins Jr. and Robert E. Cawthorn -- said in a joint press release on July 3, when they signed a letter of intent to merge, that two trusts, totaling $1.75 billion, would be established to pay "all legitimate" Dalkon Shield-related claims "in the shortest possible time ... "

"The importance of the disclosure statement in this case ... cannot be overstated," Mark C. Ellenberg, counsel for the claimants' committee, wrote. Because the plan can be confirmed only with the victims' consent, he alleged, Robins crafted the statement to conceal the plan's disadvantages and risks behind "turgid, often impenetrable prose."

For example, he said, the statement doesn't tell claimants that up to $250 million that "appears to be payable" to them "would first be used to reimburse officers and directors for claims of wrongdoing." Moreover, he said, the document "characterizes this fund as one for indemnifying doctors and hospitals."

At another point, he said, the statement "conceals the indemnification of officers and directors behind incomprehensible, technical language."

Ellenberg also said that the statement guarantees Robins' owners at least $700 million, while concealing that "the victims of Robins' conduct ... would have their claims subjected to a permanent cap that could result in less than full compensation," and would give up their right "to be guaranteed payment in full before any payments to stockholders ... "

The Justice Department, objecting separately on behalf of the Internal Revenue Service, a major creditor, focused on a provision of the code that allows retention of a bankrupt company's managers only when that is "consistent with the interests of the creditors and public policy."

The disclosure statement reveals that no changes in management are likely, and Robins "is purposefully uninformative concerning who will manage the merged corporation," Assistant U.S. Attorney S. David Schiller wrote.

"It strains the imagination to believe E. Claiborne Robins Jr. will take any steps to remove from management those responsible for the Dalkon Shield tragedy," Schiller said. "In fact, the disclosure statement says that 'substantially all' of the A.H. Robins Co. officers will remain officers" of the reorganized company.

Schiller said that the statement's "silence on management's prior conduct and {the} appropriateness" of its retention "is clearly a deliberate attempt of management to evade responsibility, cover up or ignore facts, and thereby maintain their positions of power and wealth... . Their deliberate silence only underscores once more that {Robins'} actions are being utilized to protect the personal fortunes and positions of individual executives."