3M Unit Bankruptcy Toss Is Second Blow to Mass Tort Defense Play

The termination of 3M Co. unit Aearo Technologies LLC’s bankruptcy casts fresh doubt on the tactic of using Chapter 11 bankruptcy as a legal strategy in mass tort litigation, likely emboldening plaintiffs.

The June 9 decision from Judge Jeffrey J. Graham of the US Bankruptcy Court for the Southern District of Indiana hewed closely to the US Court of Appeals for the Third Circuit’s analysis earlier this year in its dismissal of a Johnson & Johnson subsidiary’s bankruptcy on similar grounds.

The two rulings are a pair of major setbacks for solvent companies eyeing bankruptcy to handle mass tort liabilities—a ...