The Canadian subsidiaries of cigarette giants Philip Morris (NYSE:PM), British American Tobacco (NYSE:BTI) and Japan Tobacco (OTCPK:JAPAF) (OTCPK:JAPAY) have proposed a C$32.5B ($23.5B) comprehensive settlement deal to end all tobacco product-related claims and litigation in Canada.
The subsidiaries have been under a court-appointed mediation for a possible settlement since they filed for bankruptcy protection in 2019 after a Quebec court ordered around C$15B in damages in a class action suit.
The proposed settlement amount would be funded by an upfront payment equal to the companies’ cash and cash equivalents on hand in Canada, plus certain court deposits and annual payments based on a percentage of their after-tax profits from tobacco products.
The allocation of the C$32.5B between the companies in the proceedings remains unresolved.
Jacek Olczak, CEO of Philip Morris, said: “Although important issues with the plan remain to be resolved, we are hopeful that this legal process will soon conclude.”
If the plan is approved and implemented, the subsidiaries of Philip Morris (PM), British American Tobacco (BTI) and Japan Tobacco (OTCPK:JAPAF) would pay the aggregate amount into trusts for claimants, comprising two primary components.
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