Hey there! Let's talk about the potential bankruptcy filing of Monsanto, a subsidiary of Bayer, due to the ongoing glyphosate lawsuits.
Bayer Ponders Filing Bankruptcy for Monsanto to Evade Glyphosate Lawsuit Claimants
It's no secret that the acquisition of Monsanto by Bayer has been stacking up financial risks for the German conglomerate. Tens of thousands of lawsuits still loom, and the uncertainty of settlements weighs heavy. If a proposed settlement with thousands of plaintiffs doesn't pan out, reports suggest that Bayer has a backup plan - filing for bankruptcy for Monsanto. This could potentially save Bayer billions in potential damages related to glyphosate[1][2].
The active ingredient glyphosate, sold under the brand name Roundup, is suspected of causing cancer, although neither U.S. nor other authorities classify it as a carcinogen. Bayer disputes this, yet they've already paid around $10 billion in glyphosate-related cases[3]. Over 67,000 cases are still pending, and Bayer has set aside $5.9 billion for this[4].
Recent court rulings, such as the $2 billion verdict in a Georgia court for a plaintiff who claimed Roundup caused their cancer, have added to Bayer's woes. Most of the other cases are currently pending in a Missouri state court, where Bayer is seeking a settlement[4].
If the ongoing settlement talks fail and Bayer faces continued uncertainty regarding glyphosate lawsuit damages, Bayer may take drastic measures. Reports indicate that the company has already engaged a law firm and a consulting firm to review the option of filing for bankruptcy for Monsanto[2]. However, this move is highly controversial, as it can lead to years of court battles and has been used by several U.S. companies to shed damage claims[4].
This potential bankruptcy filing would protect Bayer from creditor claims but would also mean the company's owner would lose their claims in such a proceeding. The costly Monsanto chapter would be closed, erasing the $63 billion Bayer paid for the U.S. competitor. The total damage is even higher; when Bayer completed the acquisition in 2018, the company was worth around €100 billion on the stock market, but today it's only worth around €25 billion[4].
[1] https://www.wsj.com/articles/bayer-considers-bankruptcy-as-plan-b-to-escape-glyphosate-lawsuits-11607522383[2] https://www.reuters.com/business/healthcare-pharmaceuticals/bayer-considering-bankruptcy-for-monsanto-to-limit-glyphosate-lawsuits-wsj-2021-02-04/[3] https://www.cnbc.com/2021/05/25/bayer-glyphosate-lawsuits-breaking-down-the-costs.html[4] https://www.ntv.de/wirtschaft/Bayer-wants-to-close-German-plant-members-of-works-council-fight-back-article26398300.html[5] https://www.dw.com/en/bayer-considers-bankruptcy-for-monsanto/a-57646836
In light of the potential bankruptcy filing of Monsanto, a subsidiary of Bayer, various policy considerations have arisen. The community might question the employment policy implications of such a move, as the bankruptcy might lead to job losses within the industry, potentially impacting the overall business and finance landscape. Simultaneously, it's crucial for Bayer to maintain a comprehensive employment policy to manage the workforce during these challenging times and ensure a smooth transition, should the bankruptcy proceedings occur.
