Bayer Weighs 'Texas Two-Step' Bankruptcy Filing Over Roundup
Source: Bloomberg
March 13, 2024 at 12:58 PM EDT
Updated on March 13, 2024 at 2:59 PM EDT
Bayer AG is weighing whether to use a controversial legal maneuver known as the Texas Two-Step bankruptcy to try to resolve tens of thousands of US lawsuits claiming its Roundup weedkiller causes cancer, according to people familiar with its thinking.
Faced with a recent string of costly jury verdicts over the herbicide, Bayer executives are consulting with law firms and advisers about how to prompt a bankruptcy judge to halt further trials scheduled for this year. The object is to wrangle a settlement of more than 50,000 cases, said the people, who asked not to be identified discussing a confidential matter.
The bankruptcy maneuver gets its name from the use of a Texas state law that lets companies split their assets and liabilities into separate units, then place the unit loaded with liabilities into bankruptcy to drive a global settlement. Courts have rejected the tactic by 3M Co. over suits targeting faulty hearing protection devices for US soldiers and by Johnson & Johnson in litigation tied to its talc-based baby powder.
Bayer is looking for breathing room after it was hammered over the last four months with Roundup jury verdicts totaling about $4 billion. While the company has won more recent trials than it has lost, its latest courtroom defeat was its biggest yet, with a Pennsylvania jury awarding $2.25 billion to a man who blamed his cancer on long-term exposure to Roundup. Bayer maintains the product is safe. “Given the recent rulings on Texas Two-Step bankruptcies, I’m pretty sure Bayer knows this is a long-shot bid for a settlement,” said Bruce Markell, a former federal bankruptcy judge who now teaches law at Northwestern University. “But they may feel like they don’t have any other choice.”
Read more: https://www.bloomberg.com/news/articles/2024-03-13/bayer-weighs-texas-two-step-bankruptcy-filing-over-roundup
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