"Today, it's smiles all around."

What a contrast!

Last year, when Canada's 3 large tobacco companies first appeared together before Justice Thomas McEwan of the Ontario Superior Court to ask for an extended insolvency period, the tension in the courtroom was palpable. Dozens of lawyers representing tobacco companies and those suing them jostled aggressively for seating, exchanging hostile looks and stiff words.

It would be going too far to say today's hearing felt like a love-in, but there was certainly a cease-fire. It would not have been evident to anyone casually walking in before or during the short session that there were opposing sides before the judge. As the room slowly filled up, the exchanges between the archaically robed men set the agreeable tone: "How was your time in Florida?" "Today it's smiles all around!"

It took 10 brief minutes for the Judge to hear and approve the request for an extension of another 6 months on his Order that granted each company the right to operate their business pretty-much-as usual while all lawsuits against them were suspended.  First Imperial Tobacco, then Rothmans, Benson and Hedges and then JTI-Macdonald identified that they had duly submitted the required paperwork and passed the judge a draft order to be endorsed.

It was a mere formality when Justice McEwan checked for consent for the orders, which were quickly signed as unopposed.

For the record

It was only after consent was approved that Mark Meland commented on the companes' request for a further 6 months to come to a deal.

Mr. Meland represents the Quebec smokers whose court-ordered compensation payments totalling $13 billion have been blocked by these proceedings. Among dozens of lawsuits, theirs is the only one to have made it to trial and to have received not one but two rulings strongly in their favour.

These are the 'creditors' who have appeared the most frustrated by the proceedings. In previous sessions, Mr. Meland has spoken at length and persuasively (if to no discernable effect on the judge) about the harm that the process was causing the Quebec class action victim, who were dying without ever seeing justice.

Today, his comments were not intended to change any immediate decision, but to qualify past and future rulings of Mr. McEwan.

Mr. Meland diplomatically responded to the rough treatment his concerns had been given by Justice McEwan last fall. Without saying so directly, he suggested that Justice McEwan had been unfair and inaccurate in suggesting that this Quebec team was not committed to the mediation process when it had objected last fall to a length extension of the stay.

Perhaps Mr. Méland's second point was directed at the Judge, or perhaps it was directed at the victims for whom justice is still undelivered, 20-plus years after their lawsuit began.  "Our agreement to the extension is not a negation of the urgency," he said. "People are dying, they are getting weaker. The urgency has not abated, but we have a common desire to get to a settlement as soon as possible."*

He signalled that a further extension would likely not be agreed to by them. By September 30th, a resolution should be in hand, he said -- by that time 18 months would have elapsed since the insolvency proceedings began. "We must be mindful of the impact this has on our clients."

Since we're all being agreeable....

Imperial Tobacco may have over-estimated the willingness of their opponents to nod along with their requests. Just when things seemed ready to quickly wind up, they proposed a new and previously uncirculated motion, the details of which remain murky. Neither was this motion on the materials posted for the hearing, nor had they been circulated to other parties.

Without consent, Justice McEwen could not immediately put this request on his silver platter. He indicated that it thought it was a reasonable request, and said he would give ITL a chance to get a response from the other parties by the end of this week before deciding on his next step. To these ears, he seemed to signal that those who opposed the request had a choice: they could accept an out of court agreement to the companies' request, or they could come back and lose an argument before this judge.

Left unsaid

Very little was said today -- and there was no hint of what is or is not going on behind the closed doors of the negotiation.  Other than Mr. Méland's reminder of the dwindling health of those whose cancers and lung diseases were linked to the wrongful behaviour of the companies in the last century, there were no references to considerations of health. The companies whose business as usual was being protected could just as easily be making pencils.

* Verbatim quotes are even less reliable today. This Ontario court a step even further back in time, directing all reporters to limit themselves to paper and pen. 

Next stop - September 30th?

The apparent goal of next Thursday's hearing before Justice Thomas McEwen was revealed this week when the "motion record" of one of the 3 tobacco companies currently granted insolvency protection by that court was made public.

The companies are now asking for a (further) 6-plus month period in which all lawsuits against the will be frozen.  extension of the stay on all lawsuits against them. The current stay expires on March 12, and they are asking for it to be extended to September 30.

Such a request usually triggers the filing of financial data and other information in the monitor's reports. More to come!

RBH  Request for stay to be extended to September 30th. 

Links to key documents:

Motion for stay extension:

• Rothman's Benson and Hedges
• JTI-Macdonald
• Imperial Tobacco 

Monitor's Reports

• Rothman's Benson and Hedges
• JTI-Macdonald
• Imperial Tobacco

A Three Week Preponement

Yesterday notice went up that the next hearing before Justice McEwen is scheduled for February 20th -- a full 3 weeks earlier than originally scheduled.

Intriguing, yes! But not very informative.

We know from news reports that this month the parties have been intensively negotiating. As the TYEE put it "a small army of lawyers are meeting this month in Toronto [in January] as part of a mediation process aimed at settling lawsuits launched by 10 provinces, as well as class action suits and individual actions."

Have they cooked up a deal? Agreed to an earlier extension so they can all enjoy March break with their kids?

Generally material is posted ahead of such hearings by one week. Perhaps by this time next week we will know what this hearing is about.