Bayer Ponders Bankruptcy for Monsanto to Shield From Glyphosate LawsuitWoes
Bayer Ponders Bankruptcy for Monsanto to Shake Off Glyphosate Litigants
Dive into the tumultuous world of Bayer and Monsanto, as the German conglomerate grapples with a mountain of glyphosate-related lawsuits.
Bayer is toying with the notion of pushing its U.S. subsidiary, Monsanto, into bankruptcy, loosening billions in potential damages linked to glyphosate controversies. As reported by The Wall Street Journal, Bayer is entertaining this move if a proposed settlement with American plaintiffs fails to materialize.
Suspected of causing cancer, glyphosate—marketed in the States under Roundup—has Bayer scratching their heads. The company stridently denies these claims, asserting that neither U.S. nor foreign authorities categorize glyphosate as carcinogenic. Regardless, Bayer has paid roughly $10 billion (about €8.9 billion) in glyphosate-inspired settlements, with 67,000 cases still looming on the horizon, to which Bayer has assigned a $5.9 billion reserve.
Having recently faced defeat in a Georgia court, where the company was mandated to pay a staggering $2 billion to a plaintiff asserting Roundup caused their cancer, Bayer has taken the case to appeal. The bulk of the forthcoming legal battles are currently ensnrared in Missouri state court, where Bayer strives for a settlement.
Should the settlement prove elusive, and the magnitude of glyphosate lawsuits be uncertain, a bankruptcy for Monsanto could serve as Bayer’s emergency escape route, according to The Wall Street Journal. Reportedly, Bayer has already engaged a legal and consulting firm to mull over this contingency.
In U.S. bankruptcy proceedings, the enterprise shields itself from creditor claims, with the company owner’s claims usually forfeited in such instances. Several American companies have famously filed for bankruptcy on behalf of their subsidiaries to jettison liability claims, though this strategy remains a topic of intense legal debate and can spark protracted court battles.
If successful with this plan, Bayer would sever ties with the loss-making Monsanto chapter, a deal worth $63 billion that has already melted away. The total financial fallout surpasses this figure, as Bayer's market value dwindled from around €100 billion when the acquisition went through in June 2018 to a mere €25 billion today.
[1] ntv.de
[2] law360.com
[3] Reuters.com
[4] cnbc.com
[5] bloomberg.com
The community and employment policies of Bayer could potentially undergo significant changes as the company considers the bankruptcy of its subsidiary, Monsanto, to protect itself from the financial burden of glyphosate-related lawsuits. The financial implications of such a decision could impact the business and industry sectors, as Bayer might seek to restructure and redirect resources away from the glyphosate issue.
In this tumultuous period, the employment policies of both Bayer and Monsanto could become a focus of attention, as the future of the subsidiary and the workforce is uncertain. The entire affair serves as a cautionary tale about the risks involved in the finance sector, particularly in industries that deal with controversial substances.
