Imperial Tobacco Canada Limited and its affiliate, Imperial Tobacco Company Limited, commenced proceedings under the Companies’ Creditors Arrangement Act (CCAA) in Canada and Chapter 15 of the U.S. Bankruptcy Code, seeking protection in the face of extensive litigation claims, including a landmark Québec Court of Appeal judgment holding the tobacco industry liable for up to $13.6 billion in damages to Québec class action plaintiffs. JTI-Macdonald Corp. (JTIM) and Rothmans, Benson & Hedges Inc. (RBH) also filed for protection under the CCAA around the same time.

With the court-sanctioned Companies' Creditors Arrangement Act (CCAA) Plans of Compromise and Arrangement now in effect, billions of dollars began flowing at the end of August from the tobacco companies to governments seeking to recoup health care costs and will also ultimately flow to certain individuals harmed by heavy smoking.

The implementation of these CCAA plans marks the conclusion of decades-long litigation and Canada’s largest, most complex restructuring to date. Initial payments will see approximately C$24 billion paid to provinces and territories over the span of two decades, while Quebec class action plaintiffs will receive more than $4 billion to be divided amongst them. Another $2.5 billion will go to compensate other Canadian smokers, while more than $1 billion will support a not-for-profit research foundation to fight tobacco-related diseases.

Osler, Hoskin & Harcourt LLP represented Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited.

Bennett Jones LLP acted for a consortium of six provincial and three territorial governments (British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Prince Edward Island, Yukon, Nunavut and Northwest Territories). The Bennett Jones team was led by Michael Eizenga (Class Action Litigation) and included Jesse Mighton and Preet Gill (Restructuring & Insolvency).

Davies Ward Phillips & Vineberg LLP represented FTI Consulting Canada Inc., in its capacity as court-appointed monitor, with a team led by Natasha MacParland includes Natalie Renner, Robert Nicholls, Benjamin Jarvis and Jason Stephanian (Restructuring); Chanakya Sethi, Faiz Lalani, Rui Gao and Anisha Visvanatha (Litigation); Ray Rubin (Trusts); and Elie Roth, Julie Colden, Marie-Emmanuelle Vaillancourt and Darren Joblonkay (Tax).

Blake, Cassels & Graydon LLP represented Deloitte Restructuring Inc. in its capacity as Monitor of JTIM.

Thornton Grout Finnigan LLP represented JTIM.

Cassels Brock & Blackwell LLP represented Ernst & Young Inc.

McCarthy Tétrault LLP represented RBH.

Morgan, Lewis & Bockius LLP represented FTI Consulting Canada Inc. in the United States.