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. July 26, 2022 at 7:27 PM Oh wait, why bother forum shopping? 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. On August 14, she ruled she was unable to rule on the issue in one of the motions filed since lawyers for the plaintiffs had asked for intervention from the court too soon, given the fact that 3M had not yet implicated Aearo in any of the verdicts against it to date. 2022 Abraham, Watkins, Nichols, Agosto, Aziz & Stogner, All Rights Reserved | Website by NBBC Group. I should say here that 3M denies there was anything wrong with its earplugs. Their contributions have added new perspectives and ideas to this site, and we thank them for their participation. No surprise there, but the argument K&E puts forward is quite something. 3M subsidiary Aearo Technologies LLC filed for bankruptcy protection in Indiana on July 26, seeking to resolve lawsuits alleging that 3M's Combat Arms Earplugs Version 2 (CAEv2) caused hearing loss. So did the Aearo tort claimants creditors committee, which argued that there is no urgent reason to disrupt ordinary bankruptcy procedures. 3M has already lost 10 earplug trials and faces almost 250,000 more. (Attachments: (1) Exhibit 1) (Hokanson, Jeffrey) (Entered: 10/28/2022) 10/27/2022: 719: Notice of Hearing with Certificate of Service re: Motion for Protective Order, filed by Jeffrey A Hokanson on behalf of . Among them were two . Credit Slips is pleased to have had the following persons join us as continuing blog authors in the past or as guest bloggers for a week. 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. (Reuters) - By the end of 2023, we should have a much better idea about whether companies facing vast mass torts exposure can use the bankruptcy system to sidestep multidistrict litigation in federal court. 22-2890. Notably, days before the filing, Aearo Technologies entered into an agreement to indemnify 3M for all liability related to CAEv2. The Aearo Entities are operating as debtors-in-possession pursuant to 1107(a) | Let's Make Some Crypto Law! on august 26, judge jeffrey j. graham of the u.s. bankruptcy court for the southern district of indiana ruled that the bankruptcy of 3m's subsidiary aearo technologies did not halt the earplug litigation cases pending against the parent company, and denied aearo's motion for a preliminary injunction that, if granted, would have stayed more than This is a summary of a request from Aearo Technologies LLC to hire Ice Miller LLP as co-counsel, filed Aug. 9 with the U.S. Bankruptcy Court in Indianapolis. Copyright 2022 Dow Jones & Company, Inc. All Rights Reserved. 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. The judge also questioned whether Aearo's bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Indiana was an effort by 3M to avoid her jurisdiction and re-litigate earlier rulings the company disagreed with, including her decision to place thousands of claims into an administrative docket. Companies that file for bankruptcy typically receive an immediate reprieve from lawsuits, and 3M subsidiary Aearo Technologies LLC argued that extending those protections to 3M would buy Aearo time to address its debts and restructuring goals. 2022). No forum shopping! 3M's earphone subsidiary, Aearo Technologies, filed for bankruptcy today in the Southern District of Indiana. Although Bankr-L is a free service, The bankruptcy is Aearo Technologies LLC, 22-02890, United States Bankruptcy Court for the Southern District of Indiana (Indianapolis). The Indianapolis bankruptcy court isn't the typical venue for large corporate Chapter 11 cases, but its business-friendly legal findings have made it the logical choice for 3M Co.'s Aearo Technologies LLC to try to resolve widespread litigation over allegedly faulty combat earplugs. This copy is for your personal, non-commercial use only. Earplug MDL plaintiffs, meanwhile, will probably tell the 7th Circuit that Graham faithfully applied longstanding and well-reasoned circuit precedent. The judge also questioned whether Aearos bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Indiana was an effort by 3M to avoid her jurisdiction and re-litigate earlier rulings the company disagreed with, including her decision to place thousands of claims into an administrative docket. Let's call it the Hoosier Hop. 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). In the decision denying Aearos bid to halt litigation against 3M, Graham said 7th Circuit case law reflects a constrained view of both options. By declaring bankruptcy of this subsidiary, 3M attempted to avoid litigation itself with regard to the defective . The bankruptcy judge overseeing the Chapter 11 of the J&J subsidiary stayed litigation against the parent company, while Graham allowed MDL plaintiffs to continue litigating against 3M. The stakes are high for Maplewood, Minnesota-based 3M, which sought to put Aearo Technologies, the unit that made the company's Combat Arms earplugs, into voluntary Chapter 11 bankruptcy. As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. (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. Both companies have argued that the bankruptcy process is a faster, fairer way than complex federal-court litigation to resolve plaintiffs claims. Notably, days before the filing, Aearo Technologies entered into an agreement to indemnify 3M for all liability related to CAEv2. . 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. 3M's earphone subsidiary, Aearo Technologies, filed for bankruptcy today in the Southern District of Indiana. ): 2023-01-23 Debtor Aearo Technologies LLC 7911 Zionsville Road fka E-A-R Specialty Composites Indianapolis, IN 46268 MARION-IN EIN: 13- ******* Member Debtor Aearo LLC 7911 Zionsville Road Graham said that litigation against 3M would not actually impede Aearos estate because the financing agreement that the two companies entered on the eve of Aearos Chapter 11 filing made 3M ultimately responsible for Aearos liability in the earplug litigation. Graham also held that the 7th Circuit limits bankruptcy court authority to issue injunctions barring claims against non-debtors to cases that will have an actual impact on the debtor's estate, not just litigation related to the bankruptcy. Aearo Technologies filed for bankruptcy on July 26, 2022, and said it had committed $1 billion to resolve litigating arising out of the use of their earplugs. K&E must have seen the light? Oct. 18, 2022 5:42 pm ET This is a summary of a request from the official committee of unsecured creditors for tort claimants of Aearo Technologies LLC to hire Brown Rudnick LLP as special. Aearo and 3M also planned much better than J&J did--they set up a situation where Aearo's DIP financing is from 3M, but that financing is contingent upon Aearo indemnifying 3M, and that indemnification is the key hook (bolstered by shared insurance coverage) for Aearo's argument why a suit against 3M is really a suit against Aearo. klavin@verusllc.com 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. The Spokesman-Review Newspaper Local journalism is essential. The case is In re: Aearo Technologies LLC et al., case number 1:22-bk-02890, in the U.S. Bankruptcy Court for the Southern District of Indiana. Aearo Technologies will continue to operate in the ordinary course. We'll see how this plays out. The 7th Circuit has some of the laxest law in the country on third-party releases and been scared that they might run into a bad decision in the LTL appeal. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. Even if the case gets tossed on good faith filing grounds or the like, they've still probably derailed and delayed the MDL by at least six months, and who knows how much longer, given the way court scheduling works. The first is by invoking exceptions to the general rule that the automatic stay of litigation for Chapter 11 debtors does not apply to non-debtors, including parent companies. D.N.J. 3M is looking to spin off its health care business and sell off a lot of its medical supplies business. But with both circuit courts likely to rule over the next several months, we can expect answers to important statutory questions about whether parent companies mired in mass tort litigation can benefit from the bankruptcies of their subsidiaries. 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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. 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