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Creditors approve proposed $32.5B deal with tobacco giants today: lawyer

The proposed deal includes $24 billion for provinces and territories
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A smoker puts out a cigarette in a public ash tray in Ottawa on May 31, 2016. THE CANADIAN PRESS/Sean Kilpatrick

A proposed deal that would see three tobacco giants pay out billions to provinces and territories, as well as smokers across Canada, has been approved by the companiesB次元官网网址 creditors, a lawyer representing some of the creditors said Thursday, calling it an important milestone in a lengthy legal saga.

The proposed $32.5-billion global settlement between the companies B次元官网网址 JTI-Macdonald Corp., Rothmans, Benson & Hedges and Imperial Tobacco Canada Ltd. B次元官网网址 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 Thursday afternoon.

Andr茅 Lesp茅rance, who represents plaintiffs in one of the Quebec lawsuits, said creditors overwhelmingly supported the proposal.

B次元官网网址淲eB次元官网网址檙e not surprised, but weB次元官网网址檙e glad the creditors are united right now to see this plan approved,B次元官网网址 he said in French.

Before the plan can be implemented, it must obtain the approval of the court. A hearing has been scheduled for the end of January, and Lesp茅rance said heB次元官网网址檚 optimistic the proposed deal will clear that hurdle as well.

B次元官网网址淚 think weB次元官网网址檙e really close to the end,B次元官网网址 he said.

Dominique Claveau, executive director of the Quebec Council on Tobacco and Health, which is part of the lawsuit, said they look forward to having the court B次元官网网址渂ring this long-fought battle for justice and truth to its conclusion.B次元官网网址

The proposed deal 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.

British Columbia Premier David Eby, whose province initiated legal action against the three tobacco companies in 1998, said the deal is B次元官网网址渁 critical step forward after 20 years of litigation.B次元官网网址

B次元官网网址淭obacco has harmed far too many people, and tobacco companies have avoided accountability for far too long,B次元官网网址 Eby said in a statement.

B次元官网网址淲e urge tobacco companies to take responsibility for their deceptive actions and accept this plan.B次元官网网址

At least one of the companies has said it opposes the plan in its current form.

The Canadian Cancer Society, which is a social stakeholder in the case, said Thursday it hopes the proposal will be amended before itB次元官网网址檚 approved by the court.

Rob Cunningham, the organizationB次元官网网址檚 lawyer, said the plan should include smoking-reduction measures and the release of confidential industry documents, similar to what was achieved in the United States decades ago.

B次元官网网址淭hereB次元官网网址檚 a once-in-a-lifetime opportunity to better control the tobacco industry and to reduce tobacco use. WeB次元官网网址檙e never going to get this chance again,B次元官网网址 he said.

The foundation funded through the proposed deal should also have its mandate expanded to include prevention of tobacco-related disease and public awareness efforts to help people quit smoking, said Manuel Arango, vice-president of policy and advocacy for Heart & Stroke.

B次元官网网址淲e already have a lot of studies and a lot of knowledge about the treatment of tobacco-related disease,B次元官网网址 he said. B次元官网网址淪o itB次元官网网址檚 really about looking forward and helping prevent tobacco-related disease in the future.B次元官网网址

The proposal is the culmination of a corporate restructuring process set off by a decades-long legal battle over the health effects of smoking.

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 provinceB次元官网网址檚 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.





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