Canadian court approves $22.6 billion tobacco settlement
A Canadian court has approved a settlement plan for the three tobacco companies to pay C $32.5 billion (US $22.6 billion) in damages to resolve long-running lawsuits, effective from 2025. British American Tobacco’s financial outlook is not affected, and Philip Morris International will retain C $750 million (US $500 million) to keep its fuel business operating.
Key points:
1. A Canadian court has approved C $32 billion ($22.6 billion) in damages from three major tobacco companies to settle a long-running lawsuit.
2. The settlement is scheduled to take effect in 2025 and does not affect BAT’s financial expectations.
3. Philip Morris International retains C $750 million (US $500 million) to maintain the operations of the fuel business.
BAT, PMI, JTI and others to pay compensation
British American Tobacco (BAT) and Philip Morris International (PMI) said in a statement that a Canadian court approved a plan to settle a long-running tobacco lawsuit in Canada. The three tobacco companies’ subsidiaries will pay a total of C $32.5 billion (US $22.6 billion) in damages.
The settlement resolves lawsuits surrounding Philip Morris International (PMI), British American Tobacco (BAT), and Japan Tobacco (JT). The lawsuit alleges that the Canadian subsidiaries of the three tobacco giants knew since the 1950s that their products caused cancer and other diseases and failed to warn consumers adequately.
In 2019, after an appeal. Quebec court upheld its 2015 decision, ordering the payment of about C $15 billion ($10.4 billion) in damages to about 100,000 smokers and former smokers who had filed a class action lawsuit against the companies.
The ruling forced the Canadian subsidiaries of three cigarette makers. Imperial Tobacco Canada. JTI-Macdonal, and Rothmans. Benson & Hedges, to file for bankruptcy protection in 2019.
PMI said on Friday that Rothmans. Benson & Hedges were allowed to keep C $750 million ($500 million) from advances made in connection with the settlement.
- “The settlement plan also contains a series of operating covenants that will govern RBH’s fuels business until the settlement amount is paid.”
PMI said that the objections of its affiliates and other parties to the settlement plan have been resolved
The settlement plan, proposed by a court-appointed mediator, will be implemented and take effect in 2025.
BAT said the settlement would not affect its financial forecast for 2025.
