At 10 a.m. on August 7th, lawyers for JTI-Macdonald will seek approval from a New York Court for recognition of and support for the CCAA settlement plan. This information was provided in an Order from the United States Bankruptcy Court (Southern District of New York) which appeared on the website of the company's monitors earlier this week.
Also uploaded were the company's application for the Order, its Petition for Recognition, as well as an accompanying declaration and 'Memorandum of Law'.
The first dozen pages of the Petition provide a readable re-cap of the issues and also the company's motivation in seeking the order.
JTIM asserts that a positive decision to its request from the U.S. court is required before the Canadian settlement takes effect. "The entry of an order by this Court, pursuant to Chapter 15 of the Bankruptcy Code, recognizing the Canadian Proceeding and the CCAA Plan and granting related relief in order to give full force and effect to the Sanction Order and the CCAA Plan, and particularly the Releases in the U.S., which enjoyed full creditors’ approval in the Canadian Proceeding, is an unwaivable condition precedent to implementation of the CCAA Plan. Without a Chapter 15 order recognizing the Canadian Proceeding and giving full force and effect to the CCAA Plan and the Sanction Order in the United States, the CCAA Plan will not be implemented and the global settlement will fail."
If an explanation was offered as to why the 'unwaivable condition' is only being addressed so many months later, I have missed it.
The Petition provides additional insight on the value of U.S. court support: this will ensure that the release from liability is extended to the United States, giving protection both to JTIM and also to its previous owners (now a subsidiary of British American Tobacco).
"The purpose of this Chapter 15 case is to obtain recognition of the Canadian Proceeding and the CCAA Plan, and the entry of an order of this Court granting full force and effect to the Sanction Order and the CCAA Plan, so that the Debtor may enforce in the United States the CCAA Plan and the Releases for the Released Parties. The Released Parties include, among others, R.J. Reynolds Tobacco Company, R.J. Reynolds Tobacco International Inc. and RJR Nabisco, Inc. (now known as R.J. Reynolds Tobacco Holdings, Inc.) (collectively, the “RJR Group”). The RJR Group owned the Debtor from 1974 until the execution of the Purchase Agreement (as defined below) in May of 1999."
The U.S. judge who is managing the JTIM request -- John P. Mastando III - is the same person who issued a recognition order to Imperial Tobacco last summer, and which has been available on the website of FTI, the monitors for that company since last November. No equivalent material appears to be available on the website of EY, the Monitors for Rothmans Benson and Hedges.
schedules the hearing
