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  Latest News  
  January 3, 2005
Volume 83, Number 01
p. 10
 

BUSINESS

  Monsanto Owns Up To Solutia Obligations
 
  MARC REISCH  
     
 

Monsanto blinked. After years of trying to limit its exposure to Solutia's financial and environmental obligations, the biotech seeds producer has set up a $285 million reserve to cover Solutia-related liabilities.

Solutia was spun out of Monsanto in 1997 and inherited almost all of Monsanto's chemical operations as well as its environmental obligations and responsibility for retiree benefits. But as the economy soured and Solutia confronted competitive difficulties along with increased environmental cleanup costs, its obligations proved overwhelming. Solutia filed for bankruptcy reorganization in December 2003.

During a recent conference call with analysts, Monsanto CEO Hugh Grant said, "I've remained adamant that we wouldn't take on any costs that weren't our responsibility nor in our shareholders' best interests as Solutia reorganized." But he added, "We've not been naive enough to believe that we wouldn't be asked to take on some obligations."

Monsanto's reevaluation of the situation follows discussions with legal and other advisers. "We're now at a point," Grant said, "where we can at least start to draw a border around where our ultimate liabilities might be."

However, Monsanto's reserve will only cover certain litigation and environmental cleanup costs and not benefits to retirees of pre-1997 Monsanto. Grant suggested that Monsanto may ultimately have to do more. "This Solutia-related reserve represents a small step" toward reaching a resolution, he said.

 
     
  Chemical & Engineering News
ISSN 0009-2347
Copyright © 2005
 


Related Story
Solutia Files For Bankruptcy
[C&EN, December 22, 2003]


 
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