3M's Bankruptcy Attempt To Resolve Earplug Suits Rejected

Aearo Technologies, a 3M subsidiary, was declared bankrupt by a U.S. judge, who also rejected an attempt to settle over 260,000 cases that claimed 3M military earplugs caused hearing loss in veterans and U.S. service personnel.

According to the United States Bankruptcy Judge in Indianapolis, Aearo enjoys more financial certainty than is necessary for bankruptcy protection because it is a well-supported 3M subsidiary.

According to court figures from March, the claims, which have been consolidated in federal court in Pensacola, Florida, are the greatest mass tort in U.S. history, with about 330,000 cases filed and roughly 260,000 pending cases.

The earplug lawsuit, according to 3M and Aearo, had gotten out of hand and could only be settled through bankruptcy.

However, the judge determined that there was no imminent risk of insolvency as a result of the cases against 3M and Aearo, and that there was no proof that a settlement could not be made outside of bankruptcy.

Even the jury acknowledged how significant the earplug lawsuit was, accounting for 30% of all cases still outstanding in federal district courts. However, considering that 3M had paid the expenses of the legal action against Aearo and that there was no proof that either firm had been significantly hurt by the legal proceedings, the bankruptcy of Aearo was a "fatally premature" response.

Aearo was considering submitting an appeal to reopen its bankruptcy, according to a statement from 3M. The safety of the earplugs will be defended by 3M and Aearo in other courts, and 3M is also exploring appeals that might reverse the "flawed outcome" in some of the trials that have already been conducted, the company said. According to 3M, the appeals may "fundamentally change the trajectory" of the earplug litigation. The primary attorneys for the Florida lawsuit's earplug plaintiffs said that the bankruptcy constituted a "gross abuse of the bankruptcy courts."

Despite a previous decision that claims against the parent firm, 3M, which is not in bankruptcy, may be pursued, the Florida case had largely been put on hold. Aearo has filed an appeal against that verdict and is awaiting word from the 7th U.S. Circuit Court of Appeals.

In all, $265 million has been granted to 13 plaintiffs in the 16 earplug cases that have gone to trial thus far, with 10 of those cases being lost by 3M. Johnson & Johnson, which has sought to settle litigation through the bankruptcy of a recently formed subsidiary, LTL Management, has adopted a method that is similar to 3M's bankruptcy plan. According to the complaints, asbestos was included in J&J baby powder and other talc goods, which led to cancer. The claims are refuted by J&J.

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