Sulzer offer wins OK

August 29, 2001 Posted: 2314 GMT

NEW YORK (CNNfn) -- A federal judge Wednesday gave preliminary approval to Sulzer Medica's $780 million offer to settle hundreds of lawsuits over faulty hip implants, court documents said.

The U.S. District Court of the Northern District of Ohio plans to schedule a final fairness hearing in order to set a timeline for notifying people affected and allow for filing of objections or comments supporting it, Judge Kathleen O'Malley said in her order.

The Winterthur, Switzerland-based medical products company offered to settle for $780 million the rash of lawsuits related to a December recall of its Inter-Op artificial hip joints. Most of the hip joints were implanted in the United States.

The devices, made by the company's Austin, Texas-based Sulzer Orthopedics Inc. subsidiary, were tainted with a lubricant that prevented the artificial joints from properly bonding with the bone, causing them to loosen.

The preliminary settlement grants members of the class a lien on Sulzer Medica assets and intellectual properties until 2008, a Sulzer spokesman said earlier this week.

The company's shares fell sharply at the beginning of this week amid renewed concern about its ability to settle hundreds of U.S. product liability lawsuits related to the hip joints and problems with its knee implants that have also come loose and need to be replaced.

Sulzer Medica has estimated that some 4,000 operations will be required to replace the faulty devices.

The medical technology group reconfirmed Monday plans to issue to plaintiffs new shares worth up to a third of its equity and price them at $5.10 per share as part of its proposal to settle the lawsuits over faulty joint implants.

Sulzer Medica stock rose nearly 4 percent in Switzerland before the court ruling. Its American Depository Receipts rose 13 cents to close at $6.66 on the New York Stock Exchange.

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