3M recently attempted to shield its CEO from being deposed in bankruptcy court. The company claimed that the CEO lacked adequate knowledge of the company’s bankruptcy plan for its subsidiary that is holding legal liabilities for thousands of hearing damage claims, allegedly because of faulty military-issued earplugs, Law360 reported.
The deposition of Thomas Roman was scheduled for March 22 before a judge in a federal bankruptcy court in Indiana. Roman was expected to discuss details of a $1 billion trust that 3M had allocated to Aearo Technologies in order to resolve over 200,000 Combat Arms Earplugs version 2 (CAEv2) claims filed by U.S. military veterans and soldiers.
Aearo was the original manufacturer of the CAEv2 and was acquired by 3M in 2008. 3M filed for Chapter 11 bankruptcy protection on behalf of Aearo in July 2022.
3M argued that other company executives had more knowledge about how the trust was created, including how the $1 billion figure was appraised.
CAEv2 plaintiffs and attorneys have criticized 3M’s bankruptcy plan, alleging that the company is abusing the bankruptcy process in order to end the litigation. In 16 CAEv2 bellwether cases, juries have awarded 13 plaintiffs $300 million in damages in 10 trials. If 3M was forced to defend itself in future trials, the company could end up paying more than the $1 billion set aside in the trust, plaintiff advocates maintain.
In August, US Bankruptcy Judge Jeffrey Graham ruled that the stay on CAEv2 litigation granted to Aearo because of Chapter 11 bankruptcy protection does not extend to the parent company, 3M. In addition, Judge Casey Rodgers, who is overseeing the CAEv2 multidistrict litigation, issued a similar ruling that 3M must face full potential liability over hearing loss claims.
In response to 3M’s argument that Roman would not provide valuable testimony in the deposition because of his lack of knowledge, a committee representing the plaintiffs said per Law360, "Mr. Roman affirmatively spoke publicly to the press, to the investing public, and to the markets about the propriety of $1 billion … and what people should conclude about the meaning of the Debtors' bankruptcy filing. These are not the type of circumstances where courts … shield executives who know nothing about a topic from undue burden or harassment.”