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3M—Federal Appellate Court agrees to hear Aearo-bankruptcy case:
https://www.wsj.com/articles/3m-earns-appellate-review-of-earplug-units-bankruptcy-shield-11665682266
The Seventh U.S. Circuit Court of Appeals in Chicago on Wednesday granted Aearo’s petition requesting a direct review of the bankruptcy-court ruling, bypassing a federal-district court and putting the appeal on a faster track to resolution.
Employees paying for mismanagement. 3M cuts jobs.
Maybe they have the ability to look into the future.
I tend to look at investments differently sometimes.
In this case, I was buying NEOG at a discount.
Although imperfect not knowing the final ratio, an odd-lot investor could have shorted six shares of NEOG.
I know someone who bought 99 shares of MMM on Monday for $126.25 and shorted 670 NEOG locking in $1,500 of profit.
Normally, I would have done “long, short and wait.” It’s what I should have done.
If my arithmetic is correct, you expect to make about $900 on this arbitrage play—assuming that you are able to sell the NEOG shares right away.
Do you have an opinion on #msg-169803130 (bottom)? TIA
Holders of 99 shares or less will not be subject to proration.
Please see my post from 8/05/22.
I purchased 99 shares.
It pays to seek out the fine print. Most tender/exchange offers have such a clause. It’s a great way to make a little “beer money”.
Normally, I would have shorted the other company. In this case, I was simply trying to buy SpinCo at a 7 percent discount.
In other words, the exchange offer is very likely oversubscribed and hence shares tendered will likely be filled on a low pro rata basis.
The adverse bankruptcy ruling last week makes the above even more likely.
The exchange offer includes only 2.8% of 3M's shares outstanding.+
3M Sets Final Exchange Ratio in Split-Off Exchange Offer in Connection with Neogen Transaction (8/29/22)
ST. PAUL, Minn., Aug. 29, 2022 /PRNewswire/ -- 3M (NYSE: MMM) announced today the final exchange ratio of 6.7713 for its split-off exchange offer to 3M stockholders to exchange their shares of 3M common stock for shares of common stock of Garden SpinCo Corporation ("SpinCo"). The exchange offer is being conducted in connection with the previously announced pending separation of 3M's food safety business and the subsequent merger of SpinCo, a subsidiary of 3M formed to hold the food safety business, with a subsidiary of Neogen Corporation ("Neogen").
For each share of 3M common stock that is validly tendered and accepted for exchange, 3M will deliver approximately 6.7713 shares of SpinCo common stock. Upon completion of the merger, each share of SpinCo common stock will be converted into the right to receive one share of Neogen common stock. As a result, 3M stockholders who tender shares of 3M common stock in the exchange offer will receive approximately 6.7713 shares of Neogen common stock (subject to the receipt of cash in lieu of fractional shares) for each share of 3M common stock accepted for exchange. Because the final exchange ratio is less than the upper limit, the upper limit is not in effect.
The exchange offer is scheduled to expire at 11:59 p.m., New York City time, on August 31, 2022, unless terminated or extended, and the closing of the merger is expected to occur promptly following the consummation of the exchange offer. 3M stockholders may tender or withdraw their shares of 3M common stock until the expiration of the exchange offer by following the procedures described in the exchange offer materials. The closing of the exchange offer and the merger remain subject to the satisfaction or waiver of customary closing conditions, as described in the exchange offer materials.
Based on the final exchange ratio, 3M currently expects to accept for exchange approximately 15,989,536 shares of 3M common stock if the exchange offer is fully subscribed. Because the exchange offer will be subject to proration if the exchange offer is oversubscribed, the number of shares of 3M common stock that 3M accepts in the exchange offer may be less than the number of shares validly tendered by 3M stockholders. If the exchange offer is consummated but not fully subscribed, 3M will distribute the remaining shares of SpinCo common stock on a pro rata basis to 3M stockholders as of 5:00 p.m. Eastern time on August 31, 2022 whose shares of 3M common stock remain outstanding after the completion of the exchange offer. Any 3M stockholder who validly tenders their shares and whose shares are accepted in the exchange offer will have waived and forfeited all of their rights to receive any shares of SpinCo common stock in that pro rata distribution.
For more information about the exchange offer, please contact the information agent, Georgeson LLC, at 1290 Avenue of the Americas, 9th Floor, New York, NY 10104 or at the telephone number 888-607-6511 (toll-free in the United States).
About 3M
At 3M, we apply science in collaborative ways to improve lives daily as our employees connect with customers all around the world. Learn more about 3M's creative solutions to the world's problems at www.3M.com or on Twitter @3M or @3MNews.
https://www.prnewswire.com/news-releases/3m-sets-final-exchange-ratio-in-split-off-exchange-offer-in-connection-with-neogen-transaction-301614127.html
I'm a long-retired lawyer and I never understood the theory of 3M's maneuvering against the earplug litigation. That gambit certainly wouldn't have worked years ago.
I'm a long-retired lawyer and I never understood the theory of 3M's maneuvering against the earplug litigation. That gambit certainly wouldn't have worked years ago. Recently I dodged a similar situation when my kids' Monsanto holding was barely able to foist its incessant Roundup weed killer litigation onto Bayer of Germany. Thankfully Monsanto Corporation retained considerable value, but the company's brand (and balance sheet) was diminished by years in court. Monsanto, I believe, no long exists anywhere as a product nameplate.
With a market cap of $73 billion, 3M has considerable resources to carry on, but I'm guessing the company is precarious for growth. Several months ago my son asked my opinion of him buying 3M shares and I advised him to never invest based primarily on a showy payout [4.2%]. Since then, MMM is down another 15%, somewhat worse than the broad stock market. I'm holding 3M stock, but not adding
A recent article on 3M problems.
https://seekingalpha.com/article/4537364-3m-company-the-old-adage-of-not-buying-into-lawsuits
3M still_has_some shots-on-goal in_the earplug litigation…
As far as I know, 3M’s next step is to appeal the bankruptcy court’s decision in the Federal Circuit Court, where the case is heard by a 3-judge panel. I.e., 3M needs to convince 2 of the 3 Circuit Court judges to overturn the lower-court ruling.
If 3M fails to obtain a reversal of the lower-court ruling in the Circuit Court hearing, the company will presumably request an en banc rehearing of the case, where all 9 judges from the (regional) Federal Circuit Court hear the case. It takes 4 of the 9 judges to grant the request for an en banc rehearing and 5 of the 9 judges to prevail on the merits and overturn the lower-court ruling.
If 3M is unsuccessful in the Federal Circuit Court, the next step is to appeal to the USSC. At the USSC, it takes 4 of the 9 justices to grant certiorari and 5 of the 9 justices to prevail on the merits.
All told, I think 3M’s chances of overturning the lower-court ruling are 30-40%. The fact that there is a precedent for using the bankruptcy court to do what 3M is trying to do is helpful.
3M—(-9%)—fails to persuade Bankruptcy Court to accept earplug litigation:
https://finance.yahoo.com/news/3m-t-bankruptcy-halt-lawsuits-190012322.html
3M says it will appeal the ruling.
"3M Unit Defends Request to Shield Parent From Mass Earplug Lawsuits"
"Lawyers representing 3M Co. ’s bankrupt Aearo Technologies LLC subsidiary defended its request to a bankruptcy judge to extend a litigation stay to the parent company to resolve mass earplug lawsuits, saying such a move would be in line with other court rulings.
Aearo Technologies lawyer Chad Husnick on Wednesday said before Judge Jeffrey Graham of the U.S. Bankruptcy Court in Indianapolis that even though 3M itself didn’t file for bankruptcy, it also should be shielded from the 230,000 pending lawsuits that alleged 3M’s military earplugs were defective. Without the protection, Mr. Husnick said, mass lawsuits would continue against 3M in the U.S. District Court in Pensacola, Fla., and would complicate earplug unit Aearo’s restructuring."
https://www.wsj.com/articles/3m-unit-defends-request-to-shield-parent-from-mass-earplug-lawsuits-11660835021?siteid=yhoof2
3M—Federal judge allows transfer of earplug litigation to bankruptcy court:
https://www.wsj.com/articles/judge-knocks-3m-bankruptcy-strategy-for-military-earplug-lawsuits-11660578963
The bankruptcy court itself must still approve the transfer of jurisdiction, but the decision in the link above was a major hurdle that has now been overcome.
p.s. I can read only the first few sentences of the above article b/c it the full article is available only through a WSJ Pro subscription. Still, I can see enough of the article to understand what it all means.
Holders of 99 shares or less will not be subject to proration.
Beneficial holders (other than participants in the 3M 401(k) Plans) of less than 100 shares of 3M Common Stock who validly tender all of their shares may elect not to be subject to proration by checking the “Odd Lot” box in the letter of transmittal. If your odd-lot shares are held by a broker for your account, you can contact the broker and request this preferential treatment. All of your odd lot shares will be accepted for exchange without proration if 3M completes the exchange offer.
Website dedicated to 3M-NEOG exchange offer:
https://www.envisionreports.com/3MNEOGENEXCHANGE/2022/3mneogenexchangeaug4/index.html?voting=true
3M commences exchange offer for food-safety/NEOG spinoff:
https://finance.yahoo.com/news/3m-commences-split-off-exchange-164100919.html
3M announced today the commencement of an exchange offer to effect the separation of its food safety business (the "Food Safety Business"), in furtherance of the previously announced Reverse Morris Trust transaction with Neogen Corporation ("Neogen") (NASDAQ: NEOG) through the merger of Garden SpinCo Corporation ("SpinCo"), currently a wholly-owned subsidiary of 3M formed to hold the Food Safety Business, with a subsidiary of Neogen (the "Merger").
Key elements of the exchange offer include:
• 3M stockholders have the option to exchange some, all or none of their shares of 3M common stock for shares of common stock of SpinCo, subject to proration as described below. Shares of SpinCo common stock will convert automatically into the right to receive shares of Neogen common stock at the closing of the Merger, which is expected to occur promptly after completion of the exchange offer.
• Tendering 3M stockholders are expected to receive approximately $107.53 of Neogen common stock for every $100.00 of shares of 3M common stock tendered and accepted in the exchange offer, subject to the upper limit described below.
• 3M will determine the prices at which shares of 3M common stock and shares of SpinCo common stock (and ultimately shares of Neogen common stock) will be exchanged by reference to the simple arithmetic average of the daily volume-weighted average prices of shares of 3M common stock on the New York Stock Exchange and shares of Neogen common stock on the Nasdaq Global Select Market on each of the last three full trading days ending on and including the second full trading day prior to the expiration date of the exchange offer (which are currently expected to be August 25, August 26 and August 29, 2022).
• 3M currently expects that approximately 108.3 million shares of SpinCo common stock will be available in the exchange offer, with the final number dependent on the number of outstanding shares of Neogen common stock outstanding immediately prior to the closing of the Merger. The number of shares of 3M common stock that will be accepted in the exchange offer will depend on the final exchange ratio, the number of shares of SpinCo common stock offered and the number of shares of 3M common stock tendered. Based on recent trading prices of shares of 3M common stock and Neogen common stock, and assuming the issuance of 108.3 million shares of SpinCo common stock, if the exchange offer were fully subscribed, approximately 15.7 million shares of 3M common stock would be accepted for exchange in the exchange offer.
• The exchange offer and withdrawal rights are scheduled to expire at 11:59 p.m., New York City time, on August 31, 2022, unless the exchange offer is extended or terminated.
3M reports 2Q22 results—sharply lowers 2022 guidance:
• Total sales growth: -2.5 to -0.5 percent vs. 1 to 4 percent prior
• Organic sales growth: 1.5 to 3.5 percent vs. 2 to 5 percent prior
• Foreign currency translation: -4 percent vs. -1 percent prior
• GAAP earnings per share: $7.32 to $7.82 vs. $9.89 to 10.39 prior
• Adjusted earnings per share: $10.30 to $10.80 vs. $10.75 to $11.25 prior
• Operating cash flow of $6.6 to $7.2 billion contributing to 90% to 100% adjusted free cash flow conversion
2Q22 PR:
https://investors.3m.com/news/news-details/2022/3M-Reports-Second-Quarter-2022-Results/default.aspx
CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q2/2Q-2022-Earnings-Slides.pdf
3M to spin-off healthcare business to 3M shareholders in late 2023:
https://investors.3m.com/news/news-details/2022/3M-Announces-Plans-to-Create-Long-Term-Value-Through-Spin-Off-of-Health-Care-Business/default.aspx
The spin-off will be tax-free for US shareholders. 3M will initially retain a 19.9% equity stake in the yet-unnamed healthcare company.
Note: The planned split-off/merger of 3M’s food-safety business with NEOG remains on track for a 2022 closing.
3M executes the “Texas two-step” to contain earplug liability:
https://investors.3m.com/news/news-details/2022/3M-Subsidiary-Aearo-Technologies-Takes-Action-to-Efficiently-and-Equitably-Resolve-Litigation-Related-to-Combat-Arms-Earplugs/default.aspx
3M today announced it is taking action to resolve litigation related to Combat Arms Earplugs Version 2 ("Combat Arms Earplugs"). Aearo Technologies and related entities ("Aearo Technologies"), all of which are wholly-owned 3M subsidiaries, have voluntarily initiated chapter 11 proceedings seeking court supervision to help establish a trust – funded by 3M – to efficiently and equitably resolve all claims determined to be entitled to compensation.
• …Aearo Technologies was acquired by 3M in 2008 and has since operated as a wholly-owned subsidiary of 3M.
• 3M has entered into a funding agreement with Aearo Technologies to establish a trust to resolve all claims determined to be entitled to compensation, and to support Aearo Technologies as it continues to operate during the chapter 11 process.
• The claims largely relate to the previous generation Combat Arms Earplugs manufactured by Aearo Technologies, as well as discontinued Aearo Technologies mask and respirator products utilized to reduce workplace exposure to asbestos, silica, coal mine dust or occupational dusts.
• Aearo Technologies has indemnified 3M for obligations related to the claims.
• 3M has committed $1 billion to fund the trust, based on the analysis of an experienced estimator of claims in chapter 11.
• 3M has also committed an additional $240 million to fund projected related case expenses.
• 3M will provide additional funding if required under the terms of the agreement.
As a result, 3M recorded a total pre-tax charge of $1.2 billion, or $1.66 per share, and reflected it as an adjustment in arriving at its results, adjusted for special items.
"3M Has 64th Annual Dividend Increase Despite Headwinds And Legal Risk"
"Conclusion
Despite a not insignificant level of headwinds and the ever present legal risk, we still believe that due to the massive expanse of 3M's product portfolio and long history of delivering quality products, it is a good choice for a solid dividend yield on a blue-chip."
https://seekingalpha.com/article/4522882-3m-has-64th-annual-dividend-increase-despite-headwinds-and-legal-risk
3M settles with Belgium—will take $360M charge to 2Q22 earnings:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674022000056/mmm-20220706.htm
https://www.sec.gov/Archives/edgar/data/0000066740/000006674022000056/a76228kex-991.htm
3M updates Belgian manufacturing status and environmental-remediation program:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674022000052/mmm-20220610.htm
As previously disclosed in the Company’s SEC filings, 3M Belgium has been working through certain environmental matters with relevant Belgian government agencies in connection with operations at 3M Belgium’s Zwijndrecht facility, including those related to a wastewater discharge permit modification and air emissions. Actions by the Belgian government resulted in the idling of certain manufacturing processes at the facility.
As an update, 3M Belgium has received approval to begin the process toward restarting its manufacturing operations at the Zwijndrecht facility, following the Company’s previously announced investment in new and additional technologies to significantly reduce PFAS discharges and emissions from the facility. 3M Belgium expects the process for restarting previously-idled operations at the facility to take at least several weeks. Belgian government authorities continue to maintain oversight of 3M Belgium’s operations and compliance with applicable requirements at the Zwijndrecht facility.
As also previously disclosed, the Company has been working with Belgian government agencies to address remediation related to legacy manufacturing of PFAS (PFOA/PFOS) at the Zwijndrecht facility. In addition to the investments the Company previously announced to advance remedial actions for the Zwijndrecht community to address such legacy manufacturing at the facility, the Company is in discussions with the Belgian government authorities regarding additional investments to fund further remediation actions related to PFAS (PFOA/PFOS) previously produced at the Zwijndrecht facility.
3M expects $300M revenue_hit_in_2Q22_from China’s COVID lockdowns:
https://finance.yahoo.com/news/3m-expects-300-million-revenue-152459655.html
3M is unusual among multinational firms in that almost all of what 3M sells in China it manufactures in China. The COVID lockdowns forced the temporary closure of some of 3M’s manufacturing sites in China.
This was stated on today’s Bernstein webcast.
3M’s earplug-litigation scorecard for “bellwether” cases—(updated):
• 6 wins by jury verdict
• 8 wins by summary dismissal
• 10 losses by jury verdict
• zero cases settled
3M ordered to pay $77.5M in earplug case—largest_award_ yet:
https://finance.yahoo.com/news/1-3m-ordered-pay-77-173614314.html
Oops! I was only off by one log, LOL.
No "Plastic bubble is a $175 million market in the U.S. and the vast majority of the product is not recycled. "
Cushion Lock—another innovative product from 3M:
https://finance.yahoo.com/news/scotch-brand-cushion-lock-protective-171000963.html
…Cushion Lock [is] a sustainable solution made from 100% recycled paper that protects products well, is easy to use and is easy to recycle. [It]…expands by 60 times its original volume when slight tension is applied as the paper is unrolled. The Japanese art of kirigami inspired this design innovation that turns a flat sheet of paper into a three-dimensional product. Combining the art with precisely engineered cuts and folds, Cushion Lock replicates the protective and cushioning qualities of plastic bubble while eliminating the need for plastic -- filling packing boxes with less material and without the additional packing supplies typically required to secure and stabilize contents. The wrap tears by hand and its advanced self-locking technology readily fastens to itself, no scissors or tape needed to cut and secure.
3M’s earplug-litigation scorecard for “bellwether” cases:
• 6 wins by jury verdict
• 8 wins by summary dismissal
• 8 losses by jury verdict
• zero cases settled
Two more bellwether cases are going to trial in May 2022. (Source: Today’s 1Q22 CC.)
1Q22 CC transcript of prepared remarks:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q1/Q1-2022-Transcript.pdf
3M 1Q22 results—2022 guidance:
2022 GAAP EPS guidance of $9.89-10.39 was lowered by $0.26 to account for previously announced charge related to PFAS environmental remediation in Belgium (#msg-168387784).
3M will continue to report both GAAP and non-GAAP earnings; however, starting with 1Q22 non-GAAP earnings will exclude litigation expenses (as well as one-off items such as the $0.26 charge for environmental remediation mentioned above). On this basis, 3M issued 2022 non-GAAP EPS guidance of $10.75-11.25, +6-11% YoY (vs 2021’s $10.12).
(Both GAAP and non-GAAP EPS guidance exclude the effect of the planned spinoff of the food-service business and its combination with NEOG.)
Abbreviated PR:
https://investors.3m.com/news/news-details/2022/3M-Reports-First-Quarter-2022-Results/default.aspx
Financial statements:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q1/Financial-Statements.pdf
CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2022/q1/Slides.pdf
3M’s Belgium plant, where the Flemish government has halted PFAS production while environmental remediation is in progress, makes 80% of the worldwide supply of PFAS coolants used in semiconductor manufacturing. Ouch.
https://www.barrons.com/articles/chip-production-plant-shutdown-3m-pfas-51649361014
See #msg-168387784 for related info.
Some_legal_sages_think 3M will exploit the “Texas two-step”—contrary to my supposition in #msg-167972029:
https://finance.yahoo.com/news/j-j-victory-over-cancer-164854208.html
“At this point, it would be malpractice for 3M’s lawyers not to try to take advantage of the huge door that has been blown open to deal with their liabilities,” said [Charles] Tatelbaum, a Florida-based bankruptcy attorney and a former top official of the American Bankruptcy Institute.
3M's CFO just said the NEOG transaction could be either a spin-off or a split-off. (Previously, the deal has been presented to investors as a spin-off.)
2022 GAAP-EPS guidance=$10.15-10.65…
PR:
https://finance.yahoo.com/news/3m-well-positioned-long-term-130000171.html
Investor Day CC slides:
https://investors.3m.com/files/doc_presentations/2022/02/14/new/Combined-Presentations-Final-(1).pdf
3M’s 10-K discussion of earplug lawsuits—(for archival purposes):
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000066740/000006674022000010/mmm-20211231.htm#i04254fc6fdb847859444e33430354842_184 (p.113-114)
Aearo Technologies sold Dual-Ended Combat Arms – Version 2 earplugs starting in about 2003. 3M acquired Aearo Technologies in 2008 and sold these earplugs from 2008 through 2015, when the product was discontinued.
In December 2018, a military veteran filed an individual lawsuit against 3M in the San Bernardino Superior Court in California alleging that he sustained personal injuries while serving in the military caused by 3M’s Dual-Ended Combat Arms earplugs – Version 2. The plaintiff asserts claims of product liability and fraudulent misrepresentation and concealment. The plaintiff seeks various damages, including medical and related expenses, loss of income, and punitive damages.
As of December 31, 2021, the Company is a named defendant in approximately 3,616 lawsuits (including 14 putative class actions) in various state and federal courts that purport to represent approximately 13,531 individual claimants making similar allegations. In April 2019, the U.S. Judicial Panel on Multidistrict Litigation granted motions to transfer and consolidate all cases pending in federal courts to the U.S. District Court for the Northern District of Florida to be managed in a multi-district litigation (MDL) proceeding to centralize pre-trial proceedings. The plaintiffs and 3M filed preliminary summary judgment motions on the government contractor defense. In July 2020, the MDL court granted the plaintiffs’ summary judgment motion and denied the defendants’ summary judgment motion, ruling that plaintiffs’ claims are not barred by the government contractor defense. The court denied the Company’s request to immediately certify the summary judgment ruling for appeal to the U.S. Court of Appeals for the Eleventh Circuit. In December 2020, the court granted the plaintiffs’ motion to consolidate three plaintiffs for the first bellwether trial, which began in March 2021.
In April 2021, 3M received an adverse jury verdict in the first bellwether trial. The jury awarded the three plaintiffs less than $1 million in compensatory damages and $6 million in punitive damages for a total of $7 million. 3M has appealed the verdicts, challenging, among other rulings, the MDL court's denial of 3M’s motion to assert the government contractor defense. The next two bellwether trials occurred in May and June of 2021. In May 2021, 3M received a verdict in its favor in the second bellwether trial, in which a jury rejected claims that 3M knowingly sold earplugs with design defects. In June 2021, 3M received an adverse verdict in the third bellwether trial. The jury found 3M liable for strict liability failure to warn, but found 3M not liable for design defect or fraud. The jury apportioned fault 62 percent to 3M and 38 percent to the plaintiff for a total damage award of approximately $1 million. 3M has appealed the verdict. In October 2021, 3M received an adverse verdict in the fourth bellwether trial, in which a jury awarded $8 million to the plaintiff. 3M plans to appeal the verdict. 3M received verdicts in its favor in the fifth and sixth bellwether trials. 3M received an adverse verdict in the seventh and eighth bellwether trials, in which the juries awarded the plaintiffs $13 million and $23 million, respectively. 3M plans to appeal these verdicts. 3M prevailed in the ninth and tenth bellwether cases but received adverse verdicts in the eleventh bellwether case in which the jury awarded each of the two plaintiffs $15 million in compensatory and $40 million in punitive damages. 3M plans to appeal these verdicts.
The next five bellwether cases are scheduled for trial in March, April and May 2022. These trials will not include several bellwether cases that plaintiffs' counsel dismissed with prejudice either during discovery or after being set for trial. An administrative docket of approximately 240,000 unfiled and unverified claims (after factoring in approximately 50,000 claims in a transitional process as described below) has also been maintained at the MDL court. The MDL court in August 2021 provided notice of an intent to issue forthcoming transition orders requiring all claims be moved off the administrative docket to the active docket on a rolling basis over 12 months. The orders will provide that any case not moved to the active docket will be dismissed without prejudice, and the administrative docket will then be closed. To date approximately 50,000 claims are in the process of being transitioned to the active docket or dismissed. The MDL court also ordered the parties to prepare for trial 1,500 cases in three waves of 500 cases over the next 14 months. After the preparation of these cases is completed, the cases will be remanded to the federal district courts where the cases were originally filed. In November 2021, the judge issued the first wave order of the first 500 cases over the next eight months.
3M is also defending lawsuits brought primarily by non-military plaintiffs in state court in Hennepin County, Minnesota. 3M removed these actions to federal court, and the federal court remanded them to state court in March 2020. On appeal, the U.S. Court of Appeals for the Eighth Circuit ruled in October 2021 that the cases brought by non-military plaintiffs were properly remanded to state court, whereas the cases brought by military contractor plaintiffs who had received the Combat Arms Earplugs from the military should have remained in federal court. In November 2021, the Eighth Circuit granted 3M's unopposed motion to vacate the remand orders in the remaining appeals of military service member cases. The military service member cases are expected to be remanded to federal court and transferred to the MDL. There are approximately 65 lawsuits involving approximately 1,100 plaintiffs pending in the state court, but the number of plaintiffs is expected to decline as cases are remanded to federal court. The cases remaining in state court are subject to a bellwether case selection process. The first trial in Hennepin County is scheduled for no earlier than April 2022.
No liability has been recorded for these matters because the Company believes that any such liability is not probable and reasonably estimable at this time.
"3M Increases Dividend [1 cent] for 64th Consecutive Year"
https://finance.yahoo.com/news/3m-increases-dividend-64th-consecutive-221500108.html
3M is approaching the earplug litigation the way MRK dealt with Vioxx in 2004—i.e. they plan to litigate each case rather than enter into an early class settlement.
3M hit by $110M verdict in earplug case:
https://finance.yahoo.com/news/1-3m-hit-110-million-001551502.html
A federal jury on Thursday awarded $110 million [i.e. $55M each] to two U.S. Army veterans who said combat earplugs sold by 3M Co to the military caused them to suffer hearing damage, the largest verdict yet to result from hundreds of thousands of lawsuits over the product.
The two men are among the nearly 300,000 service members and others who have sued 3M claiming they suffered hearing damage as a result of using the earplugs in what has become the largest federal mass tort litigation in U.S. history.
…3M in a statement said it was disappointed and would appeal. It noted it won the last two trials involving the earplugs and said its conduct was consistent with its "long-time commitment to keeping our U.S. military safe."
…The trial was the 11th so far to reach a verdict. Plaintiffs in six trials, including Thursday's, have won more than $160 million combined. Juries sided with 3M in the five others. Five more trials are scheduled this year.
The main story with 3M—It has been able to raise product prices enough to offset the price inflation from raw materials.
3M 4Q21 results—2021 non-GAAP_EPS_of $10.12—(+14% YoY)—slightly_above_prior_guidance of $9.70-10.10.
PR:
https://s24.q4cdn.com/834031268/files/doc_financials/2021/q4/Q4-2021-Earnings-Press-Release.pdf
CC slides:
https://s24.q4cdn.com/834031268/files/doc_financials/2021/q4/4Q-2021-Earnings-Presentation.pdf
Note: 3M will provide 2022 guidance at its Investor Day webcast on 2/14/21.
looking at some dividend payers here long term
NEOG to merge with 3M’s spun-off food-safety business in $9.3M deal:
https://www.sec.gov/Archives/edgar/data/0000066740/000119312521356172/d264913dex99.htm
The combination is structured as a Reverse Morris Trust that is non-taxable to 3M shareholders, who will receive shares of NEOG but no cash. The closing is expected in 3Q22.
3M 3Q21 PR and CC slides:
https://investors.3m.com/news/news-details/2021/3M-Reports-Third-Quarter-2021-Results/default.aspx
https://s24.q4cdn.com/834031268/files/doc_financials/2021/q3/3Q-2021-Earnings-Presentation.pdf
3M trimmed its 2021 GAAP EPS guidance to $9.70-9.90 (from the prior range of $9.70-10.10) due to supply-chain disruptions. OTOH, YoY organic sales growth is expected to be 8-9%, at the high end of the prior range of 6-9%.
MMM beats on revenues; beats on EPS
https://seekingalpha.com/news/3757905-3m-eps-beats-0_22-beats-on-revenue
Shitty place to work but stick options are good!
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08/06/06
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Moderators DewDiligence |
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