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Bayer Investors Get Class Status in Monsanto Deal Risk Suit

Bloomberg Law

May 23, 2023

  • Investors alleged failure to perform due diligence
  • Bayer allegedly lost $12.87 billion in market capitalization

Two pension funds can represent a class of investors in a lawsuit alleging Bayer AG didn’t adequately vet Roundup herbicide maker Monsanto Co. before buying it and didn’t warn them about cancer litigation risks.

The lead plaintiffs cleared a big hurdle with Chief Judge Richard Seeborg‘s May 19 decision to certify a class, since such a ruling typically sets the stage for settlement. Seeborg oversees the case in the US District Court for the Northern District of California.

The stakes are high. Bayer securities lost 26% of their value, and Bayer lost $12.87 billion in market capitalization, as a result of the company’s due diligence failures, the pension funds alleged in the third version of their complaint. Bayer has said it would set aside up to $16 billion to settle tens of thousands of Roundup injury claims if the US Supreme Court rejected its bid for a shield. The Supreme Court rejected that appeal in June 2022.

Bayer said in an emailed statement Monday that it “respectfully disagrees with the Court’s decision to grant class certification and is considering its legal options.”

Carol Gilden, an attorney for the investors, called the ruling carefully reasoned and “a total victory” for her clients. Gilden is with Cohen Milstein Sellers & Toll PLLC in Chicago.

. . .

Gilden said Seeborg correctly explained that “a securities transaction is domestic when either the buyer or seller incurs irrevocable liability in the United States or title passes here.”

“This is an important holding for investors,” she said in an email Tuesday.

The investors “met this test and established that their transactions took place domestically,” Gilden said. They also showed “that a common methodology exists to establish other class members purchased their Bayer ADRs domestically,” Gilden said.

Seeborg appointed Cohen Milstein as class counsel. Morrison & Foerster LLP and Wachtell, Lipton, Rosen & Katz represent Bayer.

Read Bayer Investors Get Class Status in Monsanto Deal Risk Suit.