Creditors Approve Canadian Litigation Deal

Creditors have approved a proposed litigation settlement that would require three leading tobacco companies to pay billions to Canada’s provinces and territories, reports CBC.

The proposed CAD32.5-billion deal between JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada and their creditors was announced in October after more than five years of negotiations.

Representatives for the creditors, which include provincial governments seeking to recover smoking-related health-care costs as well as plaintiffs in two Quebec class-action lawsuits, voted on the plan in a virtual meeting Dec. 12.

The proposed settlement includes $24 billion for provinces and territories, $4 billion for tens of thousands of Quebec smokers and their heirs, and more than $2.5 billion for smokers in other provinces and territories. It also includes more than $1 billion for a foundation to help those affected by tobacco-related diseases.

If approved in court, the proposed deal would end more than a decade of litigation.

In 2015, a Quebec court ordered the three companies to pay about $15 billion in two class-action lawsuits involving smokers in the province who took up the habit between 1950 and 1998 and either fell ill or were addicted, or their heirs.

Four years later, the landmark ruling was upheld by the province’s Appeal Court. The companies then sought creditor protection in Ontario in order to negotiate a global settlement with their creditors.

All of the legal proceedings against them were put on hold during the talks. That order has now been extended until Jan. 31, 2025.

The court is scheduled to review the proposed settlement toward the end of January.