Tucker Arensberg attorney Honorable (Ret.) Judith K. Fitzgerald was quoted in a Bloomberg Law® article about the recent bankruptcy of Aearo Technologies LLC, a unit of 3M Co. The bankruptcy was terminated on June 9, 2023, by Judge Jeffrey J. Graham of the US Bankruptcy Court for the Southern District of Indiana. This is the second time in recent months that a bankruptcy court has dismissed a Chapter 11 bankruptcy filed by a company facing mass tort litigation. In January, the US Court of Appeals for the Third Circuit dismissed the bankruptcy of a Johnson & Johnson subsidiary on similar grounds.
The dismissal of Aearo’s bankruptcy is a setback for companies that have used Chapter 11 bankruptcy as a way to avoid or delay paying damages in mass tort cases. The Third Circuit’s decision in the J&J case held that a company cannot use bankruptcy to shield itself from liability for claims that arose before the bankruptcy filing. The bankruptcy court’s decision in the Aearo case followed the Third Circuit’s reasoning.
To read the Bloomberg Law® article, click here.
June 15, 2023
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