A 3M Co. subsidiary that sought to use bankruptcy to resolve claims that it made faulty combat earplugs is appealing a lower court’s decision dismissing its Chapter 11 case.
Aearo Technologies LLC’s Chapter 11 case did not have a “valid reorganization purpose,” Judge Jeffrey J. Graham of the US Bankruptcy Court for the Southern District of Indiana ruled in dismissing the bankruptcy last week.
Aearo’s notice of appeal, filed Monday, sets up a high-stakes legal battle over whether companies can use bankruptcy to resolve mass tort liability.
Graham said his ruling isn’t intended to permanently block Aearo from seeking relief from its liabilities in bankruptcy, “should the circumstances warrant it,” but allowing the case to proceed at this time would be “fatally premature.”
The case is Aearo Technologies LLC, Bankr. S.D. Ind., 6/12/23.
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