British American Tobacco p.l.c.
19 December 2014
British American Tobacco p.l.c. subsidiary, Imperial Tobacco Canada Limited (Imperial Tobacco), reaches agreement in principle to settle legacy litigation with the Flintkote Company for US $575 million
Imperial Tobacco has reached an agreement in principle with The Flintkote Company (Flintkote) - a U.S. company formerly engaged in the production and sale of asbestos-containing products - for a total of US $575 million for claims related to certain disputed dividends and existing and potential asbestos claims.
The Flintkote case is a legacy litigation that began in 2006 and is completely unrelated to Imperial Tobacco Canada's tobacco activities.
The asbestos company, Flintkote, was a subsidiary of Genstar Corporation, which was later acquired by Imperial Tobacco's corporate predecessor, Imasco Limited, in 1986. It is therefore a former indirect corporate subsidiary of Imperial Tobacco.
The 2006 litigation sought recovery from Imperial Tobacco Canada of certain dividends and other transfers received in 1986 and 1987 after Imasco acquired Genstar Corporation. The litigation also seeks to hold Imperial Tobacco liable for Flintkote's asbestos liabilities.
Today's agreement in principle of the dividend claims and the asbestos related liabilities, brings this long running litigation to an end. Under the terms of the proposed settlement, Imperial Tobacco will obtain protection from current and potential future Flintkote related asbestos liability claims in the United States.
The settlement agreement now provides closure on a legacy file, allowing Imperial Tobacco to focus on its current business by finally and completely resolving the existing Flintkote litigation and obtaining protections from potential future litigation related to Flintkote.
Note
In order to finalise the settlement, approval by the Bankruptcy Court in Delaware and the District Court will be required and this is expected to take place in the second or third quarter of 2015.
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