Imperial Tobacco gets Ontario Court to give it creditor protection, freeze the security deposit and set up an arbitration body

Yesterday evening, while the rest of us were busy with dinner, Imperial Tobacco Canada Ltd let it be known that earlier in the day it had received creditor protection from the Ontario Superior Court (Justice McEwen). Within a few hours, the background documents had been posted by the monitor.

Lo and behold!  Like the order issued earlier this week by Justice Hainey, this one puts the brakes on all the lawsuits currently facing the company.

But there's a couple of added wrinkles!  This stay order also freezes the money that the Quebec Court of Appeal had required the companies to deposit.

THIS COURT ORDERS that during the Stay Period, all rights and remedies of any individual, firm, corporation, governmental body or agency, or any other entities (all of the foregoing, collectively being "Persons" and each being a "Person") against or in respect of the Applicants, the ITCAN Subsidiaries or the Monitor or their respective employees and representatives acting in that capacity, or affecting the Business or the Property or to obtain the funds deposited pursuant to the Deposit Posting Order (including, for greater certainty, any enforcement process or steps or other rights and remedies under or relating to the Quebec Class Actions against the Applicants, the Property or the ITCAN Subsidiaries), are hereby stayed.

(You will remember that Imperial Tobacco had been required in 2015 by the Quebec Court of Appeal to post $785 million. Following the court's affirmation of the award for Quebec class action members, this money was expected to be handed over so that some victims could begin receiving payments).

And more! The stewardship of tobacco litigation seems to be assumed by a new officer of this Ontario Court.

Former judge (Warren Winkler) is made an officer of the Court "to assist and to coordinate the interests of all persons... in connection with the pending litigation" and to set up a "Tobacco Claimant Committee".  A $1 million budget is set up for this purpose.

(You might remember the name -- Justice Winkler was the one who denied the Caputo class action. Intriguingly, one of the tobacco industry defendant lawyers in that case, Glenn Hainey, is the judge who only last week issued the first stay on the Quebec ruling).

Caputo vs. Imperial Tobacco Ltd., 1997 CanLII 12162 (ON SC)

The function of the Committee that Mr. Winkler will sets up is, as explained elsewhere in their application to "represent the interests of all Tobacco Claimants in negotiating a settlement with the Applicants and others."

All that in one afternoon!  Things move faster in Toronto.