Syngenta’s GMO Corn Lawsuit
WILL THIS LAWSUIT CONCERNING GMO CORN BANKRUPT SYNGENTA?
The answer is “No.”
- Syngenta is a major multi-national corporation with a market capitalization exceeding $32 billion.
- Syngenta maintains extensive insurance, providing it with financial reimbursement rights for damages it pays to farmers in this litigation.
- Syngenta has substantial cash-on-hand, and significant operating income, which it can use to pay a large, multi-billion dollar settlement in this case. Moreover, Syngenta’s parent corporation is liable for the actions complained of in this suit; additionally, its U.S. subsidiaries have significant assets here.
- Syngenta will only pay those farmers who timely file suit against it; those who miss their state’s statute of limitations will not be included in a settlement of these claims, and will not cost Syngenta a single dollar.
The question has been asked, “will this lawsuit bankrupt Syngenta?” The answer is “No.”
First, Syngenta is a giant corporation with worldwide operations. Its market capitalization exceeds $32 billion. Syngenta’s sales exceed $14 billion per year, providing it with well over $1 billion a year in net operating capital, which can fund a major nationwide settlement in this case.
Second, maintains substantial insurance to protect itself, and to assist the corporation to fund a major settlement of these cases. Syngenta self-insures or uses a combination of insurance and self- insurance for certain risks. In its 2013 Annual Report to its shareholders, Syngenta states, “Litigation is subject to many uncertainties, and the outcome of individual matters cannot be predicted with certainty. Syngenta maintains general liability insurance, including product liability insurance, covering claims on a worldwide basis with coverage limits and retention amounts which management believes to be adequate and appropriate in relation to Syngenta’s businesses and the risks to which it is subject.”
Third, Syngenta is a worldwide operation that generates huge amounts of cash that can be used to finance a settlement of these cases. Syngenta reported “cash and cash equivalents on December 31, 2013 and 2012 of $902 million and $1,599 million, respectively. Of total cash and cash equivalents of $902 million (2012: $1,599 million), $153 million (2012: $125 million) is required to meet insurance solvency requirements of the Group’s insurance subsidiaries.” Moreover, Syngenta’s parent corporation is liable for the actions complained of in this suit, and its U.S. subsidiaries have significant assets here. There is absolutely no business risk of Syngenta declaring bankruptcy, when its enormous assets in the United States would be sacrificed in an effort to achieve protection through a U.S. bankruptcy filing.
Fourth, the liabilities faced by Syngenta are not sufficiently large to cause it to even consider filing for bankruptcy protection. While Syngenta economically harmed every corn farmer in America with its conduct, it will not have to pay them all. Syngenta will only pay those farmers who timely file suit against it; those who miss their state’s statute of limitations will not be included in a settlement of these claims. While there are more than 440,000 corn farmers in America – farming more than 88 million acres of corn – we anticipate that only 25% of them will timely file lawsuits against Syngenta before their states’ applicable statute of limitations dictates that new lawsuits against Syngenta can no longer be filed. As such, Syngenta is likely to pay settlements only to those farmers who timely file suit against them, dramatically lowering the cost of settling these cases nationwide. In conclusion, there is no realistic risk of this litigation bankrupting Syngenta, a major multi-national corporate conglomerate.
Mikal C. Watts