- Mizuho analyst Brett Linzey maintained a Hold rating on 3M Company MMM with a price target of $130.00.
- Bloomberg reported that the judge oversaw the ongoing multi-district litigation involving injuries to U.S. veterans allegedly caused by defective MMM earplugs.
- Reports found that 3M had acted in "bad faith" by attempting to transfer liabilities arising from the claims into its Aearo Technologies subsidiary (filed for bankruptcy in July).
- U.S. District Court Judge M. Casey Rodgers in Florida issued sanctions ordering MMM to accept all liabilities arising from the litigation.
- This is another tough "loss" for the company as it wrestled with several ongoing litigations.
- The Combat Arms liability came to the forefront in April 2021 when MMM lost its first trial involving safety issues with military earplugs they produced (Aearo Technologies is the entity that made the earplugs).
- A jury awarded three defendants $7.1 million who claimed they had hearing problems.
- After that trial, more than a dozen juries have issued unfavorable rulings amounting to $300 million in damages.
- There are more than 230,000+ similar claims alleging 3M sold faulty earplugs to military branches for decades.
- The company has vigorously defended these allegations and appealed any unfavorable rulings.
- Then, in July 2022, MMM announced it was taking action to resolve litigation related to Combat Arms Earplugs and voluntarily initiated chapter 11 proceedings seeking court supervision to help establish a trust funded by 3M.
- The U.S. Bankruptcy Court in the Southern District of Indiana declined Aearo Technologies' request for a preliminary injunction to ongoing litigation against 3M related to Combat Arms.
- Aearo Technologies and 3M disagree with the ruling, and Aearo intends to appeal the decision.
- Aearo planned to continue in the chapter 11 proceedings, which it believes will offer a more efficient, equitable, and expeditious pathway to resolving these matters for all parties.
- The price target reflected a five-turn discount to the group, which the analyst believes warranted given the weaker operational and top-line outlook entering '23 on top of significant legal risk mounting and lingering.
- Price Action: MMM shares traded higher by 0.27% at $120.47 on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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