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Litigation over defective ear plugs will proceed
Christina Grube
(MASS TORT NEWS) Indiana bankruptcy court denied 3M subsidiary Aearo Technologies LLC claim of bankruptcy, forcing 3M to proceed settling over 200,000 injured plaintiff cases. Judge Jeffrey J. Graham ruled that Aearo’s bankruptcy does not bar lawsuits against its financially stable parent company, 3M.
3M released a statement disagreeing with Friday’s ruling, maintaining that chapter 11 proceedings would “offer a more efficient, equitable and expeditious pathway to resolution of these matters for all parties.”
Aearo filed for bankruptcy in late July in an attempt to settle MDL claims against a defective earplug model, the Combat Arms Earplugs Version 2 (CAEv2). The attempted filing comes after 3M lost 10 out of 16 total bellwether trials.
District Judge M. Casey Rodgers, overseeing the Florida based MDL, chides the 3M corporation for “naked duplicity” in attempting to use a bankruptcy claim as a get-out-of-jail-free card.
Anne Andrews of Andrews Thornton explained to LegalCast how Fortune 500 companies now use bankruptcy filings to avoid plaintiff litigation, specifically noting Johnson & Johnson Talcum MDL 2738 and Boy Scouts of America bankruptcy claim.
“I’ve been predicting this for years,” Andrews said. “I think people thought I was crazy because ‘how can we ever replace the civil justice system and the 7th amendment right to a jury trial with bankruptcy,’ but guess what—that’s exactly what’s happening.”
Less than a year ago, Rep. Jerrold Nadler proposed the Nondebtor Release Prohibition Act (H.R. 4777) which would legally prevent companies from transferring bankruptcy debt and litigation to subsidiaries then declare the subsidiary bankrupt.
“The bankruptcy system is supposed to work for everyone,” said Nadler, “but in many cases it works only for the powerful, and too often it works best for big corporations and the very wealthy who have not even filed for bankruptcy but have figured out how to twist the system to obtain blanket immunity for their wrongdoing.”
Hunter Shkolnik of NSPR Law told Mass Tort News “This is a huge victory for members of the armed forces that were injured by these defective earplugs. These sham bankruptcies have to be stopped and this is a major first step.”
3M US Bankruptcy Docket Information:
U.S. Bankruptcy Court Southern District of Indiana Bankruptcy Petition #: 22-02890-JJG-11 In Re: Aearo Technologies LLC
Assigned to: Jeffrey J. Graham Chapter 11 Voluntary Asset Creditors: 59 Date filed: 07/26/2022 341 meeting: 09/06/2022 10:00 AM Deadline for filing claims (govt.): 01/23/2023
Debtor: Aearo Technologies LLC 7911 Zionsville Road Indianapolis, IN 46268 MARION-IN Tax ID / EIN: 13-3840356 fka E-A-R Specialty Composites fka Aearo Company fka Aearo Technologies
Kroll portal for the 3M Bankruptcy (formerly Duff & Phelps – Prime Clerk)
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