According to sources familiar with the situation, Bayer AG is considering using the Texas Two-Step bankruptcy tactic to address the numerous lawsuits in the US alleging that its Roundup weedkiller causes cancer. The company is seeking advice from legal experts on how to pause upcoming trials this year and reach a settlement for over 50,000 cases.
The Texas Two-Step bankruptcy strategy involves separating a company’s assets and liabilities into different units and placing the unit with liabilities into bankruptcy to facilitate a global settlement. Similar tactics have been dismissed in other cases, such as those involving 3M Co. and Johnson & Johnson.
Despite recent courtroom victories, Bayer’s stock has suffered a significant decline following costly jury verdicts related to Roundup. The company is exploring various options to address the litigation, including potential bankruptcy filings. However, the success of such a maneuver is uncertain, but Bayer is willing to explore all possibilities to manage the Roundup lawsuits.
While Bayer has not confirmed any specific plans regarding bankruptcy, the company’s CEO has expressed a commitment to protecting the company from litigation challenges. Bayer has successfully reduced many large jury verdicts related to Roundup, but ongoing legal battles have had an impact on the company’s profitability.
In preparation for potential bankruptcy filings, Bayer has made strategic board appointments, including adding activist investor Jeff Ubben to its supervisory board. The company is also considering bringing on experienced legal counsel to navigate the complex litigation landscape.
Bayer’s decision to explore the Texas Two-Step bankruptcy strategy reflects the company’s efforts to consolidate and settle the scattered Roundup cases. Despite criticism from legal experts, Bayer is determined to explore all options to address the mounting legal challenges related to Roundup.
Overall, Bayer is actively seeking ways to resolve the Roundup litigation and protect the company’s interests amidst ongoing legal battles.