Aearo Technologies

History

2022: Refusal to declare bankruptcy

At the end of August 2022, 3M lost the fight to block jury trials of more than 230 thousand lawsuits accusing it of harming American soldiers.

Bankruptcy Judge Jeffrey J. Graham refused to temporarily halt lawsuits accusing 3M and its bankrupt subsidiary Aearo Technologies of selling defective earplugs that damaged the hearing of veterans using them. Shares of the company 3M fell the most since 2019, almost 10% after the announcement of the court decision.

3M decided to bankrupt the "daughter" so as not to pay compensation of 230 thousand.

Judge Graham's decision blocks a plan to 3M settle claims by placing Aearo Technologies in bankruptcy proceedings, where conflicting rules sometimes allow parent companies to benefit by ending jury trials and settling their claims in one place. The temporary shutdown will help 3M pressure soldiers to agree, Graham said in his decision. But federal bankruptcy law in Indiana prevents it from acceding to 3M 's request for an injunction, Graham said.

3M is using an increasingly popular strategy in which profitable companies use bankruptcy proceedings to force settlement negotiations with victims of allegedly harmful products. Lawyers for the soldiers demanded the right to continue their cases in court. The ruling means 3M will now face the prospect of verdicts by jurors across the US, with one expert hired by soldier law firms believing the company could suffer more than $100 billion in damages.

During a trial over whether Graham should drop the lawsuits, a lawyer for the soldiers called the expert an oddball and then apologized for the insult. Veterans advocates said the decision supports their view that profitable companies should not be allowed to use bankruptcy court to avoid lawsuits.^[1]

Notes

Шаблон:Remarks