3M Earplug Unit Should Be Tossed Out of Bankruptcy, US Argues

The Justice Department said that 3M Co. unit Aearo Technologies LLC should be thrown out of bankruptcy court, citing the recent dismissal of a similar case involving a Johnson & Johnson subsidiary.

Aearo’s Chapter 11 case is an “abuse of the bankruptcy system” that was engineered to benefit its highly solvent corporate parent and avoid ongoing litigation stemming from allegedly faulty earplugs, the Justice Department’s bankruptcy oversight program—the US Trustee—told the US Bankruptcy Court for the Southern District of Indiana.

The US Court of Appeals for the Third Circuit ruled last month that J&J’s specially-created talc liability unit, LTL Management ...