Dow Corning Corp. v. Claimants' Advisory Committee (In re Settlement Facility Dow Corning Trust)

Case No. 11-2632 (6th Cir. March 8, 2013)
The Funding Agreement is unambiguous. Dow is entitled to Time Value Credits only where expressly provided for by the Funding Agreement, rather than for every payment made. Time Value Credits under the Agreement are distinct from the net present value adjustments made to compare the net present value of Dow's total payments with the net present value funding cap. Additional credits are not necessary to enforce the net present value cap because of other protective provisions under the Agreement.
Procedural context:
The District Court ruled in favor of the committee, holding that Dow was only entitled to Time Value Credits for the particular payments that were specifically entitled to such treatment under the Funding Agreement. The 6th Circuit affirmed (excepting a particular finding of the District Court that was not dispositive to the holding.)
This opinion centers on an interpretation of the "Funding Payment Agreement" in Dow Corning's plan of reorganization, the agreement by which Dow Corning would fund the "Depository Trust" used to pay silicone breast implant litigation settlement claims. Under the agreement, Dow was not required to pay more than the net present value of $2.35 billion. The way in which the parties monitored compliance with this provision was through a series of annual payment ceilings. Since Dow's payments were spread out into a series of one-year funding periods and since each funding period had a corresponding annual payment ceiling which determined Dow's maximum payment obligation during the funding period, the parties devised a method by which any excess or deficiency would be carried forward to future Periods. Dow was to pay any deficiency immediately. Any excess - caused by the combination of cash and insurance proceeds contributions - was accounted for by a credit to Dow that operated to reduce one or more future Annual Payment Ceilings. Under the Funding Payment Agreement, Dow received credit for the nominal value of the excess amount and the time value of the excess amount, referring to the latter as a "Time Value Credit." Dow, however, argued that it was entitled to a Time Value Credit for a whole host of categories of payments it had made into the fund before and after the effective date of the plan. As a result, Dow requested that the Claims Administrator adjust future annual payment ceilings downward to account for the purported Time Value Credits on the various payments made. The committee representing the tort claimants argued that Dow was only entitled to Time Value Credits for particular payments made under the Funding Payment Agreement.
Batchelder, Chief Judge; McKeague and Griffin, Circuit Judges. Opinion by McKeague, Circuit Judge.

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