Little information on the details of the settlement under discussion among the companies and the governments and smokers who are suing them was provided during the half hour hearing before Ontario Superior Court Chief Justice Geoffrey Morowetz.
In quick succession, lawyers for Imperial Tobacco (British American Tobacco), Rothmans, Benson & Hedges (Philip Morris International) and JTI-Macdonald (Japan Tobacco) stood to affirm that the companies were acting "in good faith and with due diligence", that they anticipated they would remain profitable while protected from their creditors and that more time was needed to continue negotiations. With even greater brevity the accounting firms which monitor their operations vouched for their clients.
Tellingly, none of the many parties sitting across the bargaining table from the companies said a word.
Although no further information was exchanged about the settlement under discussion, Justice Morawetz stressed that he was frequently briefed by the former Chief Justice (Warren Winkler) who was appointed as a mediator for a settlement in 2019. One reason Justice Morawetz gave for the "significant progress" over the past six months was the direction he gave to the monitors in September to propose settlement options to the parties.
While confirming that he would soon endorse an extension to the litigation stay (and agree to some additional housekeeping issues), Justice Morawetz asked the parties to keep their foot on the gas. "I continue to expect that progress will be made in a very timely basis during the extension period."
Is no news good news?
Any inference from this morning's hearing that negotiations are going well is countered by some of the text in the materials filed by the companies in advance of the meeting. RBH's submission in particular speaks discouragingly of the unproven nature of claims and "myriad contested issues" to resolve.
Each of these documents also provides a useful summary of events, the company's operations and information on the finances of the company. From these we know that more than $11.5 billion in profits have been set aside over the past 5 years, that Imperial Tobacco netted $4.5 million in sales from Zonnic since its October launch and that the company's sales from vaping products were down 37%.
POSTSCRIPT
Chief Justice Morawetz' written endorsement, issued later in the day, reflected the "I'm watching you closely" tone of his comments during the hearing. Unlike his predecessor on the file, this judge is reminding parties that he is receiving "periodic updates" from the monitor, and that his satisfaction with progress is a component of his decision to extend the litigation stay.
