3M Co. placed its subsidiary that houses its military-grade earplug business into bankruptcy proceedings as it booked a $1.2 billion charge to resolve litigation over alleged defects that are the subject of lawsuits from thousands of military veterans, the Wall Street Journal reported. The move yesterday came as the maker of Scotch tape, Post-It notes and more reported a drop in second-quarter revenue and profit. It cut its full-year sales and earnings outlook as it grapples with a stronger dollar and an uncertain economic environment that impacts consumer spending patterns. The company also disclosed plans to spin out its health care business into a separate, publicly traded company. 3M, based in St. Paul, Minn., said that its Aearo Technologies unit and related business have started chapter 11 proceedings. It has committed $1 billion to fund a trust to pay out claimants during the proceedings and $240 million to fund expected expenses related to the case. 3M said it would provide more funding if required.
