Monday, 27 September 2021

"Diligently and in good faith": tobacco companies get another 6 month extension on insolvency protection

In a now familiar pattern, Justice MacEwen's court quickly arrived at a decision to give Canada's 3 large tobacco companies a further 6 month extension on insolvency protection. All lawsuits and other claims against them are stayed until March 31, 2022.

Between 10:13 and 10:31, his virtual courtroom was in session. Youtube noted that 28 people watched the proceedings which involved an even larger number participating in the Zoom call that now substitutes for an in-person court hearing. 

During those 18 minutes, 6 lawyers representing each of the companies and each of their accounting-firm monitors gave near-identical presentations.  The companies were working 'diligently and in good faith' on a 'resolution with all stakeholders and in concert with other firms'. They were carrying on business as usual -- and making investments in new packaging equipment and new off-shore suppliers to ensure future operations.

Only 2 of the parties with claims against the companies addressed the judge -- lawyers representing Ontario and Quebec (the 2 largest claims) confirmed that they did not oppose the stay extension. 

Lawyers representing the Quebec class action (the only claim that has been upheld by a court ruling) expressed no concerns about the pace of negotiations or the impact of the delay on the injured smokers they represent, as they had done previously. Nor did the lawyers representing Ontario's tobacco farmers, whose request to be excluded from the proceedings had been twice shot down by Justice McEwen (in March, and then in June). Their new silence may reflect their satisfaction with developments behind the mediator's curtain, or merely a resignation to being in the back-seat of a process in which the provinces, as the largest claimants, will ultimately call the shots.

From a public health perspective, it is noteworthy that the recent business investments cited by the companies to foster future sales -- $20 million here to upgrade shipments to retailers, $29 million there to replace packaging equipment, $4 million in severance for workers displaced by off-shore production, $94 million budgeted for promotions and marketing -- significantly exceed the investments by governments or others to reduce tobacco consumption in the same period.

Business as usual, indeed!

Post script:

The stay extension orders can be found here: