3M files for bankruptcy for the earplugs division with many lawsuits still pending

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.

Headphones

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.