British American Tobacco (BTI, Financial) has announced it has submitted a plan to a Canadian court aiming to resolve tobacco lawsuits involving its Canadian subsidiary. Over five years ago, British American Tobacco sought bankruptcy protection for its subsidiary to negotiate pending lawsuits in Canada under court supervision.
The move followed a 2015 Quebec court ruling that mandated approximately CAD 15 billion ($10.88 billion) in compensation to smokers in the province, impacting subsidiaries of British American Tobacco, Philip Morris (PM), and Japan Tobacco International. In response, British American Tobacco allocated £436 million ($569.68 million) in 2019.
The proposed compromise and arrangement plan, submitted to the Ontario Superior Court, is supported by court-appointed mediators and monitors. The plan purports to address all tobacco-related lawsuits in Canada, offering a comprehensive resolution for Imperial Tobacco Canada (ITCAN), British American Tobacco, and associated entities.
While details of the plan remain undisclosed, British American Tobacco confirmed its support for the settlement framework, explaining that the funds will derive from existing cash reserves and future cash flows from tobacco product sales in Canada.
