Bayer AG, the German pharmaceutical behemoth behind Roundup weedkiller, is considering a sneaky legal trick known as the Texas Two-Step bankruptcy to wiggle out of over 50,000 U.S. lawsuits claiming that Roundup causes cancer. This move comes after Bayer was slammed with nearly $4 billion in jury verdicts in just the last four months.
The Texas Two-Step is a controversial maneuver that lets companies split their assets and liabilities, shoving the liabilities into bankruptcy to strong-arm a global settlement. Courts have already called out 3M and Johnson & Johnson for trying to pull off this stunt.
“Bayer is desperate for a breather after getting pummeled by Roundup jury verdicts,” said Bruce Markell, an ex-federal bankruptcy judge who now teaches law. “They know this is a long shot, but they’re running out of options.”
Bayer’s shares have nosedived by 70% since it bought Monsanto, the original maker of Roundup, in 2018. The biggest blow came when a Pennsylvania jury awarded a whopping $2.25 billion to a man who blamed his cancer on Roundup.
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CEO Bill Anderson says he’s ready to “explore every reasonable option” to shield Bayer from the onslaught of lawsuits. The company is even bringing in a savvy activist investor and a legal heavyweight to help navigate the mess.
Bayer CEO Bill Anderson said the wave of lawsuits over its widely used weedkiller Roundup is an “existential” threat to the company as it burns through cash. https://t.co/goy8Mzqplx
— Bloomberg (@business) May 23, 2024
But critics say the Texas Two-Step is just a shady way for solvent companies to game the bankruptcy system and lowball victims. Johnson & Johnson already got shot down when it tried this move in its baby powder litigation.
“Bayer seems more interested in buying time than doing right by cancer patients or reaching a fair settlement,” said Melissa Jacoby, a bankruptcy expert and law professor.
While a bankruptcy filing might put the brakes on lawsuits for now, experts think Bayer’s Texas Two-Step would likely face a fierce legal battle. Many see this as nothing more than a calculated attempt to cheat Roundup victims out of the justice they deserve, putting profits ahead of people.
As Bayer mulls its next move, the lives of thousands of Roundup plaintiffs are on the line, and it looks like the company is more worried about finding an escape hatch than owning up to the harm its product may have caused.
