Court-Appointed Mediator Proposes Plan to Resolve Tobacco-Product Related Claims and Litigation in Canada

TORONTO, October 18, 2024 - On October 18, 2024, Rothmans, Benson & Hedges Inc. (RBH) announced that the court-appointed mediator and monitor in connection with RBH’s Companies’ Creditors Arrangement Act (CCAA) proceeding filed a proposed plan of compromise and arrangement (Proposed Plan).  RBH sought CCAA protection in 2019 to enable it to conduct its business in the ordinary course while seeking to restructure its affairs, including resolving pending tobacco product-related claims against it. 

The Proposed Plan outlines certain terms of a comprehensive resolution of tobacco-related claims and litigation involving RBH and its affiliates in Canada.  The mediator also filed substantially similar proposed plans for Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited (together, ITL) and JTI-Macdonald Corp. (JTIM).  

The Proposed Plan would require RBH, ITL and JTIM (the Companies) to pay an aggregate settlement amount of CAD 32.5 billion.  This amount would be funded by an upfront payment equal to the Companies’ cash and cash equivalents on hand plus certain court deposits (subject to an aggregate withholding of CAD 750 million of working capital) and annual payments based on a percentage of the Companies’ net income after taxes (excluding that generated by certain non-combusted products including heat-not-burn and e-vapor products) until the settlement amount is paid. As stated in the Proposed Plan, the issue of allocation of the CAD 32.5 billion aggregate settlement as between the Companies in the CCAA proceedings remains unresolved.

The Proposed Plan, broadly speaking, would release all claims against RBH relating to the manufacture, marketing, sale, or use of or exposure to, RBH’s combustible and traditional smokeless tobacco products based on conduct prior to the effective date of the Proposed Plan; related litigation would also be dismissed - bringing an end to all pending tobacco product litigation in Canada, including class actions brought in different provinces and, beginning in 2001, health care cost recovery actions brought by each of the Provinces.

RBH believes that the Proposed Plan represents an important step toward resolving long-standing tobacco-product litigation against it in Canada.  Although important issues with the Proposed Plan remain to be resolved, RBH is working with all parties in good faith in the hopes of soon concluding this multi-year process to begin a new chapter focused on the future. 

The Proposed Plan, including the terms described above, remain subject to further negotiation by the parties, voting by claimants, and ultimate approval by the CCAA court. According to a schedule proposed by the mediator and monitor, voting on the Proposed Plan would occur in December 2024.  If accepted by claimants, a hearing to consider approval of the Proposed Plan would then be expected in the first half of 2025. 

Information regarding RBH’s CCAA proceedings, including copies of all court orders made and the mediator’s and monitor’s proposed CCAA plan, will be available on the Monitor’s website here

About Rothmans, Benson & Hedges Inc. 

Rothmans, Benson & Hedges Inc. (RBH), an affiliate of Philip Morris International Inc., is one of Canada's leading tobacco and nicotine companies and is working to deliver a smoke-free future. RBH is committed to sustainability and creating a positive impact on communities, the economy, and the environment. Currently, RBH employs nearly 800 people across the country with its headquarters in Toronto and a factory in Québec City. Discover more about the company at https://www.rbhinc.ca/ and stay updated on RBH's transformation by following Twitter and LinkedIn.

For further information: Media Inquiries: Media Relations, media@rbhinc.ca

 

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