Report: Monsanto May File Bankruptcy in Roundup Deal

Report: Monsanto May File Bankruptcy in Roundup Deal

Introduction

After enduring a string of massive courtroom defeats in Roundup cancer lawsuits, Bayer is reportedly weighing the possibility of placing its Monsanto subsidiary into Chapter 11 bankruptcy as a means to manage the thousands of lawsuits still pending.

This potential move comes after a decade of intense litigation that has seen Bayer and Monsanto face more than 120,000 lawsuits from individuals who allege they developed non-Hodgkin’s lymphoma after using Roundup weedkiller.

The core allegation in these lawsuits is that consumers were not adequately warned about the health risks associated with Roundup, particularly its active ingredient, glyphosate. Although Bayer has already paid over $10 billion to settle a large portion of these claims, thousands remain unresolved—especially from plaintiffs who rejected earlier offers or were more recently diagnosed.

Mounting Legal Setbacks and Strategy Shifts

Bayer has struggled in court to maintain a consistent defense of Roundup’s safety. Multiple juries have issued large verdicts against the company, significantly weakening its legal stance and prompting a strategic pivot. Rather than relying solely on litigation, Bayer has been seeking legislative and judicial relief. The company has recently focused its efforts on convincing lawmakers and the U.S.

Supreme Court that Roundup lawsuits should be preempted by federal law, arguing that the EPA’s approval of the product without a cancer warning should nullify state-based claims.

Despite these efforts, the courts have not been receptive. In a major setback, the Missouri Supreme Court earlier this year upheld a $1.25 million verdict against Bayer. This follows the U.S. Supreme Court's previous refusals to hear two other Bayer appeals—one of which involved an $87 million judgment from California.

Bankruptcy on the Table

In light of its ongoing legal troubles, Bayer may now be preparing to use the U.S. bankruptcy system as a shield against further liability. According to recent reports, the company is considering using Monsanto to file for Chapter 11 bankruptcy if it cannot negotiate additional settlements. This tactic would consolidate all current and future Roundup claims into bankruptcy court, potentially allowing Bayer to limit the total amount it pays out.

This would place Bayer among several large corporations that have tried similar legal maneuvers to manage liability. Notably, Johnson & Johnson and 3M have attempted a controversial process dubbed the “Texas Two-Step.” This involves creating a new subsidiary to shoulder all legal claims, which then declares bankruptcy. While this tactic can drastically reduce the companies’ financial obligations, it has also faced increasing scrutiny from judges. In fact, a Texas bankruptcy judge recently rejected J&J’s attempt to use the maneuver in its talcum powder litigation.

Monsanto’s Case is Different

What sets Bayer’s situation apart is that Monsanto is not a newly created entity designed to absorb liability—it is the original manufacturer of Roundup and existed independently long before Bayer acquired it in 2018. Because Monsanto has a direct connection to the product and the associated health claims, legal experts believe that its bankruptcy filing might have a better chance of being approved by the courts compared to the artificial subsidiaries used in other cases.

Legal Gambles Continue

While the bankruptcy plan remains unconfirmed, Bayer's recent legal actions reflect a company running out of options. Last month, Bayer filed a third petition with the U.S. Supreme Court, requesting the Court to rule that Roundup lawsuits are federally preempted and therefore invalid. This effort, widely seen as a long shot, follows previous denials from the Supreme Court and underscores Bayer’s urgent desire to cap its liability.

Ongoing Risk from Past Products

In 2021, Bayer announced plans to reformulate Roundup by removing glyphosate from consumer versions of the weedkiller, aiming to mitigate future legal exposure. However, this change does not affect lawsuits tied to earlier formulations. As more former users continue to be diagnosed with non-Hodgkin’s lymphoma, Bayer is likely to remain entangled in litigation for years—unless it successfully secures relief through bankruptcy or a favorable ruling from the courts.