Yesterday, Japan Tobacco made public that it wants them to wait at least another 6 months. In a motion filed in advance of the October 2nd hearing before Justice Thomas McEwen, lawyers for JTI-Macdonald asks for "an extension of the Stay Period until March 6, 2020". It reports that the other companies will make similar requests.
Very soon after losing at the Court of Appeal, the tobacco industry defendants sought protection under the federal Companies' Creditors Arrangement Act. This law allows large companies in financial distress to seek court protection from claimants while they try to work out a deal that will get them back on their feet.
Last March, the Ontario Superior Court extended that protection to all three defendant tobacco companies. It later assigned to former chief justice (Hon. Warren Winkler) the task of trying to mediate a settlement between the three companies and all of those who had filed lawsuits to seek compensation for the moral and economic damages that resulted from the companies' dishonest marketing and public relations practices. This included the 10 provinces, the Quebec class actions, one other certified class actions and a handful of copycat suits.
The claims are said to be in the order of $600 billion. These estimates of the damages caused by tobacco use are exponentially larger than the current value of the market that caused it. It's far from clear how the claimants propose to square the circle of the hundreds of billions they are owed and the much smaller amount that is currently been shaken from the pockets of Canadian smokers.
(Data from reports filed by the companies with Health Canada were made public this summer. As shown below, the companies increased their Canadian revenue by 48% after 2014 - from $2.8 to $4.2 billion per year.)
It's possible that a vision of how to move forward was provided to Mr. Winkler in one of the 'mediation briefs' that he asked to be submitted on August 1st.
At this point, outsiders are not permitted to know. All we have access to are the small details contained in the materials submitted to court. This week's motion from JTI included the following tidbits:
- A plenary session is in the works.
("the Applicant has complied with the timetable and procedure of the mediation process set out by the Court-Appointed Mediator, including the delivery of the Applicant’s mediation brief and preparation for the upcoming plenary session.") - Some data sharing is underway.
("A virtual data room ... administered by the Monitor")
We may learn more when more documents are filed in advance of the October 2nd hearing. In theory, all material is expected to be circulated a week in advance. You can follow along at the monitor's web-sites for the three CCAA applicants:
