Louis-based chemicals maker also told Monsanto and Pharmacia in writing Tuesday it would weigh any future liability payouts. On Wednesaday, Solutia accused Monsanto of short- shrifting it in the 1997 spinoff.
At that time, "we were given half a loaf in terms of businesses," Glenn Ruskin said for Solutia, which makes nylon products, films for laminated safety glass and aftermarket, water- treatment chemicals, heat-transfer fluids and aviation hydraulic fluid.
"(Monsanto) sort of cherry- picked what they wanted and threw in all kinds of cats and dogs as part of a going-away present," including $1 billion in debt and environmental and litigation costs accrued by Monsanto and Pharmacia throughout a century of manufacturing.
Solutia's pending legal and financial troubles continue to cast a shadow on one of the Northwest Florida area's major employers.
The company's Gonzalez plant is the largest integrated nylon plant in the world, with 1,030 employees and 600 contractors.
Local Solutia spokesman Glenn Ruskin said the Texas litigation won't affect the local plant, and he looked beyond potential questions of company viability.
"I'd think a lot of investors would say: `I'm glad to see they are being more aggressive,"' he said. "In this case we could pay, but we are not."
In 1999, Monsanto was acquired by Pharmacia & Upjohn to create Pharmacia Corp., which last year completed a spinoff of its biotechnology and agricultural businesses to form the current Monsanto Co.
Pharmacia was acquired by Pfizer Inc. in April.
In the Texas cases involving more than 100 plaintiffs and never naming Solutia as a defendant, Ruskin said that "while we could make the payment, we strategically made the determination that we're not gonna do it."
Solutia said its notice of nonpayment - what Ruskin calls the company's "hard line" - enables Monsanto and Pharmacia to make the payments on their own.
Solutia said it has not told either company it will not honor any remaining liabilities, although the company said it would evaluate the prudence of making such payments each time they're due.
Solutia has warned in recent months it could be forced to seek Chapter 11 bankruptcy protection if it fails to shed debt, come up with cash for its pension fund and address legacy liabilities costing the company about $100 million annually.
Solutia has not turned a profit for four straight quarters, posting a net loss of $178 million in the third quarter that ended Sept. 30. Solutia has said it does not expect matters to improve at least before next spring, citing volatility in energy costs, soft consumer confidence and sluggish demand.
In lawsuits brought against Pharmacia, Solutia said it is defending about 570 asbestos actions involving 3,500 to 4,500 plaintiffs, about 30 cases involving alleged exposure from PCBs made by Pharmacia before the spin-off, and roughly 90 general and product liability claims.
Solutia expects the average yearly cash costs related to the defense of such claims to be about $20 million "for the foreseeable future."
Solutia also is on the hook for health care and insurance for 20,000 Monsanto retirees and their dependents who never worked for Solutia, roughly five times the number of Solutia retirees, dependents and surviving spouses. The yearly tab: about $60 million.
"The company may not be successful in satisfying these future liquidity requirements on favorable terms, if at all," the company said. Solutia said it "is considering all available alternatives to address these matters," including potential Chapter 11 reorganization under the federal bankruptcy code.
Shares of Solutia fell 28 cents, or 10.3 percent, to close at $2.45 Wednesday on the New York Stock Exchange. Monsanto shares closed at $27.65, down 35 cents.