3M Co. stock tumbled 9.5% on Friday, pacing the Dow Jones Industrial Average’s steep decline after reports indicated that a bankruptcy judge blocked a request from 3M that would have shielded the company from litigation around earplugs that were sold to the military and later alleged to have caused issues such as hearing loss.
The company’s Aearo subsidiary filed for bankruptcy last month, allowing the subsidiary to pause pending lawsuits, but the judge determined that 3M
which itself did not file for bankruptcy, is not entitled to those protections, per the reports.
“We are disappointed in the court’s ruling today and will be filing an appeal,” 3M said in a statement posted to its website. “Continuing to litigate these cases one-by-one over the coming years will not provide certainty or fairness for any party. The well-established Chapter 11 process provides a simpler, more efficient path to resolution without the uncertainty and inequity of continuing to litigate.”
See more: In a busy morning 3M announces healthcare spin off, mixed earnings and subsidiary’s voluntary bankruptcy
3M’s stock logged its largest single-day percentage decline since April 25, 2019, when it dropped 13%, according to Dow Jones Market Data, which also noted that 3M was the worst performer in the Dow Jones Industrial Average
and the S&P 500
The stock shaved 89.77 points off the Dow industrials, which was down 1,008 points on the day.
3M was the ninth most actively traded stock in the S&P 500 Friday.
The company “remains committed to provide $1 billion to a trust to help resolve these claims through the Chapter 11 process,” it said in Friday’s release.
However, a legal professor told MarketWatch when 3M had discussed the trust back in July that $1 billion likely wouldn’t be enough to settle the claims. The lead counsel for the plaintiffs also called the trust “woefully underfunded.”
Shares of 3M have declined 34% over the past 12 months as the Dow has lost 8% over the same period.