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Class Actions & Multi-District Litigation, Allianz deal to sell Russia operations faces delay due to regulator, Zurich Insurance sees $550 mln hit from Hurricane Ian, on track for targets beat, Generali sticks to 2024 targets, generates $1 bln per year for M&A, Canada's BMO books $834 mln charge over U.S. Ponzi lawsuit loss, Forum: Litigation finance as a multi-tool for corporate law departments, How municipal lawyers can help in the fight against climate change, Boies, Hausfeld among law firms reaping $667 mln windfall in Blue Cross antitrust case, Insights in Action: Differing perceptions of stand-out lawyers skill sets, stayed litigation against the parent company, See here for a complete list of exchanges and delays. 3M's Aearo Technologies' Bankruptcy: the Hoosier Hop 3M's earphone subsidiary, Aearo Technologies, filed for bankruptcy today in the Southern District of Indiana. It is a lengthy and unabashed criticism of the dysfunctionality of the MDL system. Aearo Technologies and 3M disagree with the ruling and Aearo intends to appeal the decision. In re LTL Mgmt., LLC, 637 B.R. in Corporate Bankruptcy. 3m has committed $1 billion to fund the trust, based on the analysis of an experienced estimator of claims subscription on Bankr-L, Now like J&J, 3M appears solvent and capable of paying all of the hearing claims in full. As part of her efforts to decide the issue, Judge Rodgers had requested the earlier indemnification agreement between 3M and Aearo as well as information on which company carried liability on its balance sheets. D.N.J. The cases are being jointly administered under Case No. The financing appears to have been agreed to the day before the bankruptcy filing, so it's not technically a DIP financing agreement--no court approval seems necessary (at least from my quick glance). klavin@verusllc.com Under agreements signed between Aearo and 3M, the parent company has committed to pay $240 million to fund Aearo's reorganization process in the U.S. Bankruptcy Court in Indianapolis and at. The 7th Circuit order means that Aearo will not have to first challenge the ruling by U.S. Bankruptcy Judge Jeffrey Graham of Indianapolis in federal district court, which is usually the first stop for bankruptcy appeals. But it's really quite ridiculous--it's the Naboth's Vineyard problem--where Aearo's argument for protecting 3M is primarily based on an action it chose to as part of a financing deal it "negotiated," rather than seeking arm's length DIP financing, which would not have such a ridiculous indemnification. The very future of mass tort litigation may depend on what the 7th and 3rd Circuits decide. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. Aearo Technologies LLC 7911 Zionsville Road Indianapolis, IN 46268 MARION-IN Tax ID / EIN: xx-xxx0356 fka E-A-R Specialty Composites fka Aearo Company fka Aearo Technologies Represented By. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. 3M Co. MMM, -1.51% said Tuesday its Aearo Technologies subsidiary and related entities have voluntarily filed for bankruptcy, to help establish a trust funded by 3M to resolve claims related to . For its part 3M has offered to fund Aearo Technologies' operations and capital needs during the bankruptcy process, according to court documents, and also create a $1 billion trust that would. 3M's earphone subsidiary, Aearo Technologies, filed for bankruptcy today in the Southern District of Indiana. For questions regarding claims, please call Aearo Technologies' claims agent, Kroll Restructuring Administration LLC: (855) 639-3375 (Toll-Free US/Canada) or +1 (347) 897-3818 (International) as well as by email at aearotechnologiesinfo@ra.kroll.com. Bankruptcy Petition #: 22-02890-JJG-11 Assigned to: Jeffrey J. Graham Chapter 11 Voluntary Asset Date filed: 2022-07-26 Deadline for filing claims (govt. You can tell from my summary that Aearos legal arguments will likely be dauntingly technical. Those suits are mainly in a federal MDL based in Florida (apparently the largest MDL in history) and a Minnesota state court action. J&J likewise maintains that its talc products are safe. But theres no doubt that the consequences of these numbing questions about the relationship between parent companies and bankrupt subsidiaries have never been higher than they are now, in the era of the so-called Texas two-step to use bankruptcy to shut down mass tort claims. The bankruptcy is Aearo Technologies LLC, 22-02890, United States Bankruptcy Court for the Southern District of Indiana (Indianapolis). This copy is for your personal, non-commercial use only. Let's call it the Hoosier Hop. 3M Co. put its Aearo Technologies unit into bankruptcy in a bid to resolve more than 230,000 lawsuits brought mainly by US military veterans over allegedly faulty combat earplugs. Moreover, Aearo filed for bankruptcy in the Southern District of Indiana, where it is headquartered, rather than in Delaware where all the entities are incorporated. The lawyers at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner stand with these veterans and will continue to fight their fight in whatever legal battlefield they encounter. In conjunction with the chapter 11 process, Aearo Technologies will file customary first day motions with the bankruptcy court seeking authority to continue operating in the normal course of. By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. In a briefing filed in Indianapolis bankruptcy court, Aearo Technologies and 3M openly criticized Judge Rodgers rulings and handling of the MDL. 3M is looking to spin off its health care business and sell off a lot of its medical supplies business. The. Aearo and 3M had argued that bankruptcy offered a faster and fairer way to compensate veterans who say that earplugs made by Aearo caused hearing loss. I should say here that 3M denies there was anything wrong with its earplugs. (FOX 9) - Hearing more than 200,000 combined claims that its Combat Arms Earplugs Version 2 were faulty, 3M subsidiary Aearo Technologies has initiated filing for Chapter 11 bankruptcy. Plaintiffs lawyers, they said, had continued to make filings, despite the automatic stay in place since 3M subsidiary Aearo Technologies filed for bankruptcy on July 26. Frankly, the funding looks a lot like a fraudulent transfer--the indemnification obligation the debtor incurred exceeds any value it received from 3M at a time when it was insolvent. 2022). D.N.J. Earplug MDL plaintiffs, meanwhile, will probably tell the 7th Circuit that Graham faithfully applied longstanding and well-reasoned circuit precedent. | LTL ran into trouble in part because some of the tort plaintiffs were prepared to meet it head on on day one of the case, before an Official Committee was formed. The brave men and women of the United States military, many of whom suffered hearing loss and tinnitus as a result of using 3Ms CAEv2 deserve better than these shenanigans. 396, 411 (Bankr. , 637 B.R. Courthouse, Indianapolis and via [LINK:Zoom] . If a court buys that story, then all of the moves--the injunction and the funding agreement and the ultimate non-debtor release--are sort of necessary pieces that have to be accepted. A Dartmouth college graduate, she has worked as a journalist in New York covering the legal industry and the law for more than three decades. Earlier today, the United States Bankruptcy Court in the Southern District of Indiana declined Aearo Technologies' request for a preliminary injunction to ongoing litigation against 3M related to Combat Arms Earplug Version 2 products. We are fourteen academics who will use this space to discuss and debate issues not just for specialists but for anyone who cares about creating good policies in these areas. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. July 26, 2022 - Aearo Technologies LLC and six affiliated debtors (together "Aereo Technologies" or the "Debtors") filed for Chapter 11 protection with the U.S. Bankruptcy Court in the . At a July 27 hearing in Pensacola, FL, U.S. District Court Judge M. Casey Rodgers expressed concerns regarding 3Ms decision to resolve the more than 230,000 lawsuits pending against it by putting its Aearo Technologies division into bankruptcy, in what appears to be an effort to offload its liabilities onto the newly formed and now bankrupt subsidiary. 3M's earphone subsidiary, Aearo Technologies, filed for bankruptcy today in the Southern District of Indiana. Aearo Technologies LLC designs and manufacturers materials for noise, vibration, shock, thermal and cushioning solutions for commercial vehicles, heavy equipment, medical equipment, electronics and aircraft. Plaintiffs in the earplug MDL, in which combat veterans have won 10 of 16 bellwether jury trials and have garnered a total of $25 million in damages, opposed Aearos request to proceed directly to the 7th Circuit without stopping in the trial court. 3M Co. put its Aearo Technologies unit into bankruptcy in a bid to resolve more than 230,000 lawsuits brought mainly by US military veterans over allegedly faulty combat earplugs. I don't know. | Let's Make Some Crypto Law! Alison Frankel has covered high-stakes commercial litigation as a columnist for Reuters since 2011. Before joining Reuters, she was a writer and editor at The American Lawyer. Here's the story. Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. On July 26, 2022, Aearo Technologies LLC and six related entities. Is 3M earplug bankruptcy the beginning of the end of mass tort MDLs? Additional information is available on resolvingearpluglitigation.com and www . On July 26, 2022, Aearo Technologies LLC and six (6) affiliated debtors (collectively, the "Debtors") each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Indiana (Indianapolis Division). Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. The two appellate cases present essentially the same questions, albeit in opposite postures. Luxury Tower at Steep Discount. And for authority that bankruptcy offers the solution, the adversary proceeding complaints quotes the bankruptcy court in LTL: Addressing mass torts through a legislative scheme enacted by Congress within the bankruptcy system provides a judicially accepted means of aggregating and resolving mass tort claims. The 3rd Circuit, as you probably recall, is weighing a parallel case. (If you change your mind, you can undo it later.) The second, broadly speaking, is by seeking an injunction on the grounds that litigation involving a parent company is related to the subsidiarys bankruptcy and could affect the debtors restructuring. 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