Reynolds American Inc. and R.J. Reynolds Tobacco Co. asked the Delaware Court of Chancery to dismiss a lawsuit by Philip Morris USA over the allocation of payments under Florida’s 1997 tobacco settlement. At a Nov. 10 hearing, Reynolds argued that a previous Delaware ruling requiring ITG Brands to reimburse it for more than $250 million in Florida settlement payments did not increase Philip Morris’ financial obligations or give Reynolds an improper $112 million benefit.
Philip Morris contends that Reynolds saved $112.8 million from 2015 to 2023 through the settlement’s profit-adjustment formula, shifting a greater share of payments to competitors. The dispute stems from Reynolds’ 2014 sale of Winston, Salem, Kool, and Maverick to ITG Brands, which did not assume the brands’ Florida settlement obligations.
