Monsanto Still Gauging Costs Of Solutia Bankruptcy
St. Louis, MO, Jan. 8--Monsanto Co. on Wednesday said it was still analyzing the company's potential liability from the bankruptcy of former affiliate Solutia Inc. The case could take up to two years to resolve, it said.
"We can't estimate the potential cost to Monsanto," Monsanto Chief Financial Officer Terry Crews told analysts and reporters on a conference call.
Chemical maker Solutia filed for bankruptcy protection on Dec. 17, overwhelmed by huge liabilities related to environmental lawsuits and employee benefits it said were forced upon it by Monsanto.
Crews reiterated that Monsanto does not intend to take on any liabilities that are not justifiably tied to the company.
He said the company had yet to set aside any reserve against potential liabilities that Monsanto may be forced to take on through the bankruptcy process.
Monsanto had been granted one of nine seats on the creditors' committee, which would benefit Monsanto's interests, he said.
Solutia, spun off from Monsanto in 1997, estimates that its "legacy" liabilities should amount to about $100 million a year for the next five years and could eventually total about $755 million.
The legacy liabilities were assigned to Solutia when it separated from Monsanto and include the financial responsibility for employee benefits, asbestos and PCB contamination clean-up costs, and expenses for some 600 lawsuits involving the former Monsanto and another formerly affiliated company, Pharmacia, which is now part of Pfizer Inc.
Through contractual arrangement with Pharmacia, which at one time owned Monsanto, Monsanto agreed to assume certain liabilities if Solutia fails to do so.
