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Bayer's Monsanto sues Wells Fargo, Citizens over default threats
[NEW YORK] Monsanto, the US agribusiness giant acquired by Bayer this year, said in a court filing Monday that lenders who hold leases on some company planes may try to claim the takeover placed the contracts in default, even though all payments are current.
The company sued Wells Fargo Trust and Citizens Asset Finance in New York federal court, asking a judge to block the lenders from declaring the leases in default. The contracts require St Louis-based Monsanto to maintain a credit rating of BBB- or better, according to the lawsuit. Monsanto said Bayer's takeover won't drive its credit rating lower than BBB-.
Monsanto alleges Wells Fargo and Citizens Asset Finance are simply trying to avoid a "significant loss'' when they eventually take possession of the aircraft when the leases end. The market value of the aircraft is well below what Citizens expected when it took over the leases, according to the lawsuit.
Monsanto asked a judge to issue a declaration finding Bayer's takeover doesn't put it in breach of the lease covenants, and that Citizens is engaging in misconduct.
Wells Fargo didn't immediately respond to a request for comment. Citizens said it had no immediate comment.