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3M (NYSE:MMM) on Friday was maintained by analysts at Bank of America at an investment rating of Underweight. The unchanged ratings come a day after a federal judge said court-sponsored mediation talks were on hold. between 3M (MMM) and the plaintiffs allege that the earplugs manufactured by a unit of the company for the U.S. military are defective.
US District Judge M. Casey Rodgers said the talks were dropped because both sides were inflexible. 3M (MMM) sought to settle the multi-district litigation — the largest in U.S. history with about 230,000 lawsuits — through bankruptcy proceedings. Judge Rodgers said the veterans “unequivocally refused” a resolution in bankruptcy court.
The judge is allowing the mediator to continue to facilitate informal settlement efforts and is scheduling a hearing on the plaintiff’s military health record. Another lawsuit brought by plaintiff David George will begin on February 13 after it was pushed back from October.
3M (MMM) encountered legal setbacks in an attempt to protect itself from liability in earplug lawsuits. Aearo Technologies, the manufacturer of earplugs that 3M (MMM) purchased in 2008, filed for bankruptcy protection in July because of litigation. Aearo sought to refer earplug-related claims against Aearo and 3M to bankruptcy court as part of an effort to reach a settlement that 3M said it would pay.
A bankruptcy judge in August refused to extend bankruptcy court protection to 3M (MMM) after granting it to Aearo against pending earplug lawsuits. This decision means that claims can continue against 3M (MMM) without Aearo at Judge Rogers’ court. Aearo has appealed the decision and continues to seek settlements with the veterans.
3M (MMM) has argued that liability for earplug injury claims is split between Aearo and 3M. Judge Rodgers last month rejected 3M’s (MMM) argued and said the company took responsibility for the earplugs when it purchased Aearo and that it had not attempted to separate liability before. She has ruled that the case proceedings will be put on hold pending a tentative appeal.
3M (MMM) has said that filing for bankruptcy is not an attempt to evade liability for earplug injury claims, but instead is a way to determine who is entitled to compensation. in a more efficient manner.
3M (MMM) over the past 12 months fell 34%, compared with a 14% drop in the Standard & Poor’s 500 stock index (SP500).
