3M appeals bankruptcy court’s refusal to stop 230,000 earplug combinations (1)

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3M Co. has filed a notice of appeal of a recent bankruptcy court ruling rejecting the manufacturer’s bid to block more than 230,000 lawsuits alleging its earplugs harmed US soldiers.

Monday’s notice comes after U.S. Bankruptcy Judge Jeffrey J. Graham on Friday declined to stay the lawsuits, which accuse 3M and its bankrupt subsidiary, Aearo Technologies, of selling defective combat earplugs.

Bankruptcy courts sometimes grant stay of suit requests against non-bankrupt companies with ties to a Chapter 11 debtor, as 3M did in the Aeroro case. Graham’s decision on Friday to allow the lawsuit to continue against 3M calls into question the company’s decision to try to resolve the mass tort litigation by filing Aearo for bankruptcy.

In July, 3M placed its Aearo subsidiary in bankruptcy in the US Bankruptcy Court for the Southern District of Indiana. The filing came after what the company said was three years and $350 million in legal fees spent in multidistrict litigation over allegedly faulty earplugs used by the US military. More than 230,000 plaintiffs, most of them military, claimed the earplugs caused hearing damage.

Aearo said he wants to continue using the Chapter 11 process to reach a settlement that would end all related tort lawsuits and claims against the unit and 3M.

3M said it would fund a $1 billion settlement trust to compensate people suing the earplugs — the majority of tort claims. The strategy is similar to those used by other companies facing large personal injury liabilities, including Johnson & Johnson and Purdue Pharma LP.

The case is Aearo Technologies LLC, Bankr. SD Ind., No. 22-02890, opinion of 29/08/22.

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