Senators Warren, Durbin and Lawmakers Call on the Seventh Circuit to Reject 3M’s Attempt to Use Bankruptcy to Evade Accountability to Military Veterans
Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.) and Dick Durbin (D-Ill.) led a group of Senate and House Democratic colleagues in submitting an amicus brief in a bankruptcy case before the Seventh Circuit Court of Appeals in support of 231,000 military veterans who are seeking restitution from 3M and its subsidiary, Aearo Technologies, for allegedly manufacturing defective earplugs.
“3M’s attempt to force [a stay of litigation] through its free-form, atextual gloss on the Code’s provisions would give any giant corporation a roadmap to avoid virtually any mass tort liability by obtaining a bankruptcy-like absolution without providing bankruptcy-required protections for creditors,” wrote the lawmakers. “That was not the result that Congress intended . . . and it is not a result that this Court should permit.”
The lawmakers argue that the Bankruptcy Code was designed to provide individuals and companies with a fresh start following financial calamity, and allowing wealthy corporations like 3M to exploit loopholes and skirt accountability would corrupt the purpose of the bankruptcy system.
The company and its subsidiary attempted a complex maneuver similar to the infamous “Texas Two-Step” to dodge the veterans’ lawsuits, but a bankruptcy court rejected this attempted evasion, and 3M and its subsidiary appealed to the Seventh Circuit. The Court’s decision in this case will have wide-reaching implications for consumers who have been harmed by dangerous products.
Senators Warren and Durbin were joined by Senators Sheldon Whitehouse (D-R.I.), Richard Blumenthal (D-Conn.), Tammy Baldwin (D-Wis.), and Tammy Duckworth (D-Ill.), and Representatives Jerrold Nadler (D-N.Y.) and David Cicilline (D-R.I.).
Senator Warren has long been a leading voice in the fight for holding big corporations accountable to their consumers:
- In November 2021, Senator Warren joined Senators Durbin and Blumenthal, along with former Representative Carolyn B. Maloney (D-N.Y.) and Representative Raja Krishnamoorthi (D-Ill.) in sending a letter to Johnson & Johnson objecting to the company’s efforts to manipulate bankruptcy laws to evade accountability for harm caused by its products.
- In September 2021, Senators Warren and Cornyn (R-Texas) introduced the Bankruptcy Venue Reform Act which would require large corporations to file for bankruptcy in their home state, or where significant assets are located.
- In July 2021, Senators Warren, Durbin, and Blumenthal introduced the Non-debtor Release Prohibition Act to prohibit the use of non-debtor releases that helped entities escape accountability for wrongdoing through bankruptcy proceedings.
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