In August 2023, 3M and Plaintiffs’ Leadership Counsel for the MDL and Minnesota coordinated proceeding agreed to a Master Settlement Agreement to resolve claims against 3M’s Combat Arms Version 2 earplugs manufactured from 1999 to 2015. (A website has been set up for claimants for more information.) And the Star Tribune reported that more of the 276,000 claimants who are part of the 3M lawsuit may soon opt into the settlement instead of going to trial. Specifically, the last MDL count is 276,568 cases.
CNN announced last month that 3M has begun sending out approximately $250 million in payments to service members and veterans, with payouts being completed by the end of January. It is unclear, however, exactly how much money each individual claimant will receive. What is clear is that this first round of payments is expected to reach over 30,000 past and present military service members. And these payments are part of a multibillion settlement regarding the defective safety equipment. Still, the $6 billion settlement amount is significantly less than the $10 billion to $15 billion that some analysts predicted the case would cost the company, reports Fox News. 3M stated that it will record a $4.2 million pre-tax charge in the third quarter, which "represents the $5.3 billion pre-tax present value of contributions under the agreement net of 3M's existing accrual of approximately $1.1 billion related to this matter.”
Under the settlement, 3M was going to shell out $5 billion in cash and $1 billion in 3M common stock to claimants between 2023 and 2029. Judge Rodgers approved this plan based on the valuation methodology and other considerations supporting the fairness of using unregistered stock for payment.
But on January 30, 2024, 3M decided to pay $1 billion in cash, instead of using stock. One law firm explained that this amendment to the settlement was made a month after they received court permission to issue unregistered stock. The change is finalized and outlined in a court order specifying a schedule for six payments, according to Miller & Zois. These payments will start after it’s confirmed that at least 98% of claimants have agreed to participate in the settlement, a threshold 3M expects to exceed by March 25, 2024. As to why 3M is choosing cash payments over stock, attorneys said, “No idea. My guess is that it was a huge administrative hassle.”
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Either way, one plaintiffs’ attorney said "We are pleased with 3M's decision to move up this payment and appreciate its commitment to the resolution of these claims".