3M begins $6B settlement payment to veterans, issuing $253M in January
1st round of payments is expected to go out to over 30K past and present military service members
Multinational conglomerate 3M is beginning to pay out over $250 million dollars to veterans and military service members for defective ear plugs.
Approximately $253 million will be distributed as part of a settlement after earplugs manufactured by the company were alleged to provide insufficient protection and contribute to hearing loss.
"We are pleased with 3M's decision to move up this payment and appreciate its commitment to the resolution of these claims," said plaintiffs' attorney Bryan Aylstock.
3M TO PAY $6 BILLION IN MILITARY EARPLUGS CASE AFTER HEARING-LOSS COMPLAINTS
A sign sits out 3M global headquarters in Saint Paul, Minnesota. 3M acquired Aearo Technologies in 2008. Aearo Technologies produced faulty ear plugs that ultimately led to the largest tort case in U.S. history. (REUTERS/Nicholas Pfosi/File Photo / Reuters Photos)
The payments, which are expected to go to over 30,000 past and present service members, are part of a larger multibillion settlement regarding the defective safety equipment.
The earplugs, developed by Aearo Technologies, were created to protect a person from hearing explosions and other loud noises while allowing them to hear voices or softer noises.
3M and attorneys representing plaintiffs agreed to a $6 billion settlement to resolve hundreds of thousands of complaints by military veterans that the company's earplugs did not protect them from hearing loss.
3M ORDERED TO PAY $50 MILLION TO ARMY VETERAN IN EARPLUGS LAWSUIT
The settlement amount is significantly less than the $10 billion to $15 billion that some analysts predicted the case would cost the company. Still, the settlement will impact financial results.
3M 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," the company detailed.
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The 3M global headquarters in Maplewood, Minnesota. (Michael Siluk/Education Images/Universal Images Group via Getty Images / Getty Images)
The earplug litigation represents the largest mass tort in U.S. history.
There have been more than 300,000 claims in which veterans accuse 3M and Aearo Technologies, a company acquired by 3M in 2008, of producing faulty earplugs that failed to protect their hearing from noise damage when they received them from the U.S. military, according to reports.
Fox Business's Landon Mion contributed to this report.