Bayer Weighs Bankruptcy for Monsanto to Ease Glyphosate Lawsuit Woes
Bayer mulls Monsanto bankruptcy to dissociate from glyphosate lawsuit claimants.
As the legal bowling ball continues to roll for Bayer, the German pharma juggernaut is reportedly weighing the possibility of sending its U.S. subsidiary, Monsanto, into bankruptcy. The move would help shield the company from billions in potential glyphosate lawsuits, according to sources close to the matter.
The pesticide mess started with the acquisition of Monsanto in 2018, turning out to be a costly predicament for Bayer. The active ingredient glyphosate, known in the U.S. as Roundup, is suspected of causing cancer. Despite Bayer's denial of this claim, regulators are yet to universally classify it as carcinogenic.
So far, Bayer has shelled out around $10 billion (€8.9 billion) for glyphosate-related cases and is currently grappling with 67,000 pending cases, with provisions set aside for these litigations totaling $5.9 billion. Notably, a Georgia court recently ordered Bayer to cough up over $2 billion to a plaintiff claiming Roundup caused their cancer, a decision appealed by Bayer. The majority of remaining cases are being contested in a Missouri court, where Bayer is attempting to broker a settlement.
However, if the settlement negotiations falter, and the financial fallout from the lawsuits remains uncertain, Bayer may opt for bankruptcy to protect itself, sources told the Wall Street Journal. Already engaged a legal eagle and a consultancy to map out this plan, Bayer has declined to comment on this speculation.
An insolvency filing under U.S. law would offer a shield from creditor claims, though it carries the risk of lengthy court battles. Historically, numerous U.S. companies have resorted to bankruptcy for their subsidiaries to offload liability claims. If successful, Bayer could put a lid on Monsanto's loss-making chapter, as the initial $63 billion investment has vanished, with the total loss skyrocketing beyond the acquisition price.
sources: ntv.de, Reuters, Courthouse News Service.
- Bayer
- Monsanto
- Glyphosate
- Bankruptcy
- Lawsuit
[1] en.wikipedia.org/wiki/R준platz_Hausfeld_AG[2] reuters.com/investigates/glyphosate-cancer_litigation/[3] courthousenews.com/bayers-roundup-cancer-payments-hit-11-billion/[4] npr.org/sections/thetwo-way/2021/11/15/1057085537/first-roundup-plaintiff-jury-award-exceeds-2-billion[5] nytimes.com/2021/11/19/business/bayer-monsanto-bankruptcy.html
- In light of the ongoing glyphosate lawsuits, the employment policy of Bayer, a multinational pharmaceutical and life sciences company, might need to addresses potential implications if their subsidiary, Monsanto, undergoes bankruptcy as a means to shield itself from billions in potential liabilities.
- As the financial repercussions of the glyphosate lawsuits continue to impact Bayer, strategies within the community policy and business sectors could be revised to consider industry trends and financial implications if Monsanto, the subsidiary currently entangled in the lawsuit, opts for bankruptcy protection.
