Creditors to Vote Today on Proposed $32.5B Deal with Tobacco Giants

Creditors are expected to vote today on a proposed settlement that would see three major tobacco manufacturers pay out billions to provinces and territories, as well as smokers across Canada.

The proposed $32.5-billion global settlement between the companies—JTI-Macdonald Corp., Rothmans, Benson & Hedges, and Imperial Tobacco Canada Ltd.—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, are expected to review and vote on the proposed plan in a confidential virtual meeting.

If the proposal is accepted by a majority of creditors, it will then proceed to the next step: a hearing to obtain the approval of the court, which has been tentatively scheduled for early next year.

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.

The companies sought creditor protection in Ontario in early 2019 after they lost an appeal in a landmark court battle in Quebec.

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