Tomorrow morning the dozens of parties involved in Canada's long-running tobacco industry insolvency saga will appear (virtually) before Chief Justice Morawetz. The hearing is scheduled for 9:00 a.m. and can be viewed in real time on Youtube.
The materials to be considered at the meeting have amassed over the past few months. Left over from the postponed hearing in September are motions for an extension of the litigation stay by each company and the reports of their monitors. More recent additions are the proposed plan of arrangement that has garnered significant attention and concern, a motion by JTI-Macdonald expressing its disagreement with the proposed plan, additional monitor's reports for each company - and more!
These documents are available on the monitor's websites: EY for Rothmans, Benson and Hedges, FTI for Imperial Tobacco and Deloitte for JTI-Macdonald.
A bumpy road ahead?
Today's addition to this pile is a Joint Factum of the Court-Appointed Mediator and Monitors. This document outlines the process by which the proposed plan will be subject to a vote on December 12th. It also anticipates concerns or objections about the proposed plan, and offers legal arguments to support the unusual way in which the plan emerged. The level of detail in this legal instruction from one former chief justice (Warren Winkler was Chief Justice of Ontario from 2007 to 2013) to his successor (Geoffrey Morawetz was appointed Chief Justice of Ontario in 2019) suggests that the former may feel that the deal he brokered is not a slam dunk.
Further context and explanation is provided in the monitor's reports filed this week for Imperial Tobacco, JTIM and RBH.
For the first time in this process, these reports identify some sticking points or lack of agreement. They note that only 10 of the 13 provinces and territories support the plan, although the identify of those with reservations is not provided. ("Amongst the Provinces and Territories, ten of the thirteen jurisdictions, support the CCAA Plans.")
The reports also note continuing disagreement among the companies regarding who pays how much. ("The issue of allocation of the Global Settlement Amount as between the Tobacco Companies in the three CCAA Proceedings remains unresolved.")
Not doomed to fail (or guaranteed to be found fair and reasonable).
Former Chief Justice Winkler's report to the court holds up the draft plan as a document suitable for the vote, but acknowledges that the vote is not the final stage."3. The CCAA Plans are plans of compromise or arrangement. They accordingly reflect difficult, yet necessary compromises by a broad range of diverse stakeholders with the goal of achieving a just and workable result in these staggeringly complex circumstances. Whether the CCAA Plans strike the right balance and are ultimately fair and reasonable, however, is a question for another date... At this preliminary juncture, the question is simply whether the CCAA Plans are “doomed to fail”.
