Chemical giant 3M has filed for bankruptcy for its division of Aearo Technologies, which makes earplugs. The company hopes to end lawsuits brought by US veterans alleging they suffered hearing damage while wearing earplugs sold by 3M to the military.
Court documents show that the US company has already spent nearly $350 million defending nearly 230,000 claims related to the earphones. According to 3M, bankruptcy is the quickest and fairest way to resolve things. When a company files for bankruptcy, the lawsuits are paused, and the lawsuits then go to the bankruptcy judge.
3M says it’s putting $1 billion into a fund and paying those who complained about earplugs. 3M has set aside $240 million in bankruptcy financing.
The complaints relate to noise-isolating earplugs, which Aearo sold in droves between the early 2000s and 2015. Only a handful of lawsuits have been settled, most of them veterans. In one case, the court ruled that the company must pay $77.5 million.
3M also announced on Wednesday that it will be divesting from its $45 billion health business. The company also lowered its revenue forecast for the current fiscal year. 3M now expects adjusted earnings of $10.30 to $10.80 per share, from previously forecast earnings of $10.75 to $11.25 per share.
Investors reacted positively to 3M’s announcements. Shares rose 4.4 percent to $140.02 on the New York Stock Exchange.