Future financial obligations stemming from U.S. lawsuits related to hip- and knee-joint replacements. Sulzer AG and its former unit Sulzer Medica (NYSE: SM – news) AG have reached an agreement on the future financial obligations stemming from U.S. lawsuits related to hip- and knee-joint replacements.
Sulzer Medica (SM) agreed to pay all future liability that goes beyond a settlement proposal between the company and U.S plaintiffs that brought thousands of lawsuits after receiving faulty hip and knee replacements.
The deal means Sulzer will no longer bear any remaining financial risks, including risks relating to patients who opt out of the settlement, the group said. Sulzer said it signed the agreement with Sulzer Medica last weekend.
Sulzer Chief Executive Fred Kindle said: “I am confident that the settlement will overcome the last hurdles and that we can finally close this chapter for Sulzer.”
However, Sulzer spokesman Markus Niederhaeuser said that should the settlement — worth $1 billion — not be accepted by a large number of U.S. patients, the accord between Sulzer and Sulzer Medica may have to be revised.
Sulzer Medica and Sulzer will pay $725 million and $75 million
Under the plan, Sulzer Medica and Sulzer will pay $725 million and $75 million, respectively, in cash and financial instruments. A further $200 million is covered by insurer Winterthur International Insurance.
Patients who don’t wish to accept Sulzer Medica ‘s settlement proposal will be able to file individual lawsuits after March 8 . A final fairness hearing is scheduled May 14 .
In December 2000 , Sulzer was forced to recall thousands of artificial joints after it was disclosed that a manufacturing change had contaminated some with an oily residue that prevented the new joint from bonding with patients’ bones.
Earlier this month, Urs Kamber, Sulzer Medica ‘s chief financial officer, said the details of how much money each person would receive must still be worked out. “We don’t know for certain yet, but it is in the range of $200,000 per patient,” he said. Tommy Jacks, a plaintiffs’ attorney who helped negotiate the deal, said at the time, “I think this is a settlement that will really provide for patients who had to endure a lot of suffering.” At the same time, he added, “it’s a settlement that will not force Sulzer into bankruptcy, because that’s when the patients would really lose out.”