3M Stock Surged After Bank of America Said That 3M’s Appeal of the Bankruptcy Court Verdict Is a Significant Event to Follow.
Bank of America analysts wrote in a note published on Wednesday that 3Ms (NYSE:MMM) appeal of a bankruptcy judges rejection of a significant portion of its legal strategy is one of the most crucial developments for investors to follow going into 2023. As a result, 3M stock surged. However, personal harm lawsuits will move forward because a 3M subsidiary produced substandard military earplugs.
By shifting the liabilities associated with the 230,000 lawsuits filed on behalf of military veterans to a subsidiary that attempts to resolve claims in bankruptcy court, the 3Ms (NYSE:MMM) hopes to better manage the costs associated with these cases. Companies like Johnson & Johnson and Georgia-Pacific have employed this tactic to reduce the number of class action lawsuits filed against them.
While 3Ms (NYSE:MMM) earplug-making company, Aearo Technologies, had filed for chapter 11 bankruptcy protection last year, an Indianapolis bankruptcy court decided against that last month. A petition for review was submitted by 3M stock on September 13 and was accepted by the Seventh Circuit Court of Appeals.
At an investor conference this month, 3Ms (NYSE:MMM) chief legal affairs officer Kevin Rhodes said the company anticipates a ruling in four to six months.
Rhodes has stated that Aearos chapter 11 petition is not an attempt to escape any liabilities that may arise from this incident. Its a means to determine who may be eligible for compensation more fairly and efficiently.
As part of its bankruptcy proceedings, Aearo must begin the claims estimating process, which will involve a review of hearing test data to determine which claimants are eligible for compensation.
On October 24, a new trial concerning earplugs, George v. 3M Co., will begin. Judge M. Casey Rodgers of the U.S. District Court, who has cast doubt on the 3M stock bankruptcy plan, presided over the case. Mark Lanier, who previously represented plaintiffs in lawsuits against Johnson & Johnson related to the companys talc products, is now representing the plaintiff in this case.
After the court-mandated mediation session on September 15-16 failed to produce a settlement, Judge Rodgers ordered a second session within two weeks.
This year, 3M stock has dropped by 34%, while the S&P 500 Stock Index has dropped by 19%. (SP500).
3M stock shot higher after Bank of Americas statement that 3Ms appeal of the bankruptcy court verdict is an important event to follow.
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Author: Shariq Khan
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