3M Reaches $6 Billion Agreement to Settle Defective Earplug Lawsuits: Latest Updates and Details

2023-08-29 21:45:17

The American conglomerate 3M, accused of having supplied defective earplugs to the American army for years, announced on Tuesday that it had reached an agreement of 6 billion dollars to put an end to these lawsuits.

In detail, the juggernaut – which notably manufactures protective equipment for people – will pay 5 billion dollars by 2029 to the plaintiffs, to which must be added a billion in the form of shares, a-t- he clarified in a press release.

Its leaders stressed during a conference with analysts that this agreement was not worth acknowledging responsibility.

This announcement aims to put an end to years of litigation between 3M and its subsidiary Aearo Technologies – acquired in 2008 – and several thousand American soldiers who believe that their hearing has been damaged by defective earplugs.

The plugs in question were developed by Aearo Technologies in 1999 for the American military, in particular to protect them from the sound of gunfire. They were sold from 1999 to 2015.

But the complaints have multiplied.

The conglomerate faces 246,000 complaints at the time of the conclusion of the agreement, he said during the conference call on Tuesday.

However, this agreement will only be activated if 98% of complainants accept it.

Those who refuse it will be able to continue their legal proceedings, recognized the leaders while specifying that the agreement envisaged provisions in this eventuality.

Numerous lawsuits

However, they expressed confidence in the final resolution of the dispute.

“Extensive negotiations” took place during a “months-long” mediation involving both 3M and Aearo but also the plaintiffs’ attorneys, argued Kevin Rhode, chief legal officer and vice president of 3M, during the hearing. conference call.

The agreement was hailed as “historic” by lawyers representing the plaintiffs.

This is a “tremendous victory for the thousands of men and women who have served our country and who have returned home with life-altering hearing damage”, reacted the firms Aylstock, Witkin, Kreis & Overholtz, Seeger Weiss, and Clark, Love & Hutson, in a statement provided to AFP.

The 3M group nevertheless defended the harmless nature of its earplugs, saying in its press release that these devices were “effective when used correctly”.

The Department of Veterans Affairs was not immediately available to react to the announcement of this agreement and the Department of Defense did not wish to comment at this stage.

This is not the first time that 3M, a diversified group that manufactures medical equipment, tape rolls and post-its, has been attacked for its products.

In June, it agreed to pay up to $12.5 billion in legal action brought by several public drinking water distribution networks for the contamination of its networks by PFAS, chemical components used in particular in waterproof packaging and coatings.

This agreement, which must still be validated by a judge, provides for the payment of sums over thirteen years, between 2024 and 2036.

Also accused of pollution in Belgium, 3M concluded an agreement in 2022 with the regional authorities of Flanders for 571 million euros, for polluting discharges around its factory near Antwerp (north).

The company, which employs 93,000 people and is present on almost all continents, achieved in 2022 a turnover of 34.2 billion dollars and generated a net profit of 5.8 billion dollars.

The deal announced Tuesday will result in a pretax charge of regarding $4.2 billion in the third quarter.

Even if the agreement “will have a very negative impact on the results, it removes the uncertainty on the subject, which will please investors”, commented Neil Saunders, director at GlobalData.

Third Bridge analyst Ryan Keeney said the deal would save 3M “heavy legal fees if the case went ahead”

“An agreement is positive for 3M because it allows them to extinguish a search for liability,” he added.

The title of 3M ended up 1.39% at 105.57 dollars at the close of the New York Stock Exchange.

1693347947
#pay #billion #avoid #earplug #lawsuit #TV5MONDE