3M Nears a $5.5 Billion Settlement Over Defective Military Earplugs

3M Co. is in the final stages of negotiations for a substantial $5.5 billion settlement related to allegations of defective earplugs, as per reports released on Sunday.

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According to sources, the company is on the brink of resolving a comprehensive set of legal actions stemming from over 300,000 lawsuits connected to faulty combat earplugs. These earplugs purportedly failed to provide adequate protection to a significant number of military veterans, leading to varying degrees of hearing loss.

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The proposed settlement amount of $5.5 billion, jointly put forth by 3M MMM, 4.12% and its subsidiary Aearo Technologies, stands notably lower than the earlier projections made by experts, who had estimated 3M's potential liability to be around $10 billion, as indicated in the reports. This legal case has evolved into one of the most extensive mass tort litigations in the annals of U.S. legal history.

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Aearo Technologies had initiated bankruptcy proceedings in July 2022 in an effort to address the ongoing litigation. According to sources cited in The Journal, the final decision on the proposed settlement is yet to be ratified by 3M's board of directors.

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In the preceding month of July, 3M disclosed an adjusted quarterly profit that surpassed anticipations, attributed in part to a substantial charge of $10.3 billion reserved for an envisaged settlement linked to "forever chemicals" detected in drinking water.

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As of the present year, 3M's shares have experienced a decline of 17%, a contrast to the S&P 500's SPX 15% gain over the same period.

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