CP Kelco sues Monsanto unit

CP Kelco ApS, a newly created food-gums company, has sued Pharmacia & Upjohn Inc, alleging its Monsanto Co unit provided misinformation in order to complete a $592 million sale of its biogum division, the Wall Street Journal reported. The suit, filed in the U.S. District Court in Delaware, alleges that the team from Monsanto, in selling the biogum division to form CP Kelco​, kept the operating executives of the Monsanto business from discussing the unit's business trends with the buyers, the paper said. CP Kelco is seeking 430 mln usd in compensatory damages, as well as punitive damages. One Pharmacia document, cited in the lawsuit, contains a written admonition from an executive that reads: "Not Shared with Lehman" - an indication, the lawsuit says, of information deliberately withheld from the buyers, which were Hercules Inc and a buyout fund run by Lehman Brothers Holdings Inc. The lawsuit also alleges that the Monsanto merger team inflated financial figures and made false representations. One of the allegations is that Monsanto executives hid actual internal forecasts made by midlevel operating executives, and induced the sales team to "pull forward" contracts from 2000 into 1999, to buttress the 1999 results. The Kelco lawsuit also includes allegations that Monsanto hid from buyers potential problems relating to a Environmental Protection Agency permit at a Monsanto plant in Okmulgee, Oklahoma. Pharmacia said in a statement it "is confident that it made all the appropriate disclosures to Lehman." Source : Wall Street Journal