Court File Numbers

CV-19-615862-00CL; CV-19-616077-00CL; CV-19-616779-00CL

Date

2025-03-06

Superior Court of Justice - Ontario

In the Matter of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended and in the Matter of a Plan of Compromise or Arrangement

And in the Matter of a Plan of Compromise or Arrangement of JTI-Macdonald Corp.

And in the Matter of a Plan of Compromise or Arrangement of Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited

And in the Matter of a Plan of Compromise or Arrangement of Rothmans, Benson & Hedges Inc.

Before: Chief Justice Geoffrey B. Morawetz

Heard: January 29, 30 and 31, 2025
Additional Submissions: March 3, 2025

Table of Contents

A. Introduction
B. Overview of CCAA Plans
C. Background Leading to Development of CCAA Plans
D. Purpose and Effect of CCAA Plans
E. Structure of the CCAA Plans to Settle All Tobacco Claims in Canada
F. Allocation of Global Settlement Amount
G. Parent and Tobacco Company Group Support Through Intercompany Services
H. Global Release and Settlement of Claims
I. Settlement of Claims by Individuals Resident in Canada Who Suffered Tobacco-Related Harms
J. Settlement of Quebec Class Action Judgments and Quebec Class Action Administration Plan
K. Pan-Canadian Claimants’ Compensation Plan
L. Supervision, Oversight and Administration of the Quebec Administration Plan and the PCC Compensation Plan
M. Cy-près Foundation
N. Disposition of Pending Proceedings
O. Position of the Parties
P. The Law
Q. The Third Party Releases Should Be Granted
R. The CCAA Plan Administrator Appointment Orders Should Be Granted
Disposition
Expression of Gratitude
Endorsement

A. Introduction

[1] On March 8, 2019, JTI-Macdonald Corp. (“JTIM”) obtained an Initial Order pursuant to the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the “CCAA”). Deloitte Restructuring Inc. (“Deloitte”) was appointed as the Monitor of JTIM.

[2] On March 12, 2019, Imperial Tobacco Canada Limited and Imperial Tobacco Company Limited (collectively “Imperial”) obtained an Initial Order pursuant to the CCAA. FTI Consulting Canada Inc. (“FTI”) was appointed the Monitor of Imperial.

[3] On March 22, 2019, Rothmans, Benson & Hedges Inc. (“RBH”) obtained an Initial Order pursuant to the CCAA. Ernst & Young Inc. (“E&Y”) was appointed as the Monitor of RBH.

[4] A number of elements of these three CCAA filings overlap and the proceedings of JTIM, Imperial and RBH (the “Tobacco Companies”) are collectively referred to as the CCAA Proceedings.

[5] On April 5, 2019, the Honourable Warren K. Winkler, K.C., was court appointed as mediator (the “Mediator”) of the Tobacco Companies in the CCAA proceedings to oversee and coordinate a multi-party, comprehensive mediation (the “Mediation”) among the Tobacco Companies and their key stakeholders and mediate a global settlement of the Tobacco Claims (as defined in the Imperial Plan, the RBH Plan and the JTIM Plan, collectively the “CCAA Plans”).

[6] After a period of four and a half years, the Tobacco Companies had failed, both individually and collectively, to produce a plan of arrangement or compromise.

[7] On October 5, 2023, the court directed the Monitors to work with the Mediator to develop a plan of compromise or arrangement for each Tobacco Company.

[8] On October 31, 2024, Meeting Orders were granted in each of the Tobacco Companies’ CCAA proceedings pursuant to which a plan of compromise or arrangement in respect of each of the Tobacco Companies dated October 17, 2024 (the “October 17 CCAA Plans”) was accepted for filing and creditors meetings for Affected Creditors were scheduled for December 12, 2024 (the “Meetings”). (Defined terms used but undefined in this endorsement are as set out in the Third Amended and Restated CCAA Plan of Compromise and Arrangement in respect of each Tobacco Company dated February 27, 2025 (the “Third A&R CCAA Plans”).)

[9] On December 5, 2024, the Monitors served CCAA Plans that amended and restated the October 17 CCAA Plans. The amendments were administrative in nature.

[10] The Meetings of Affected Creditors to vote on the CCAA Plans took place on December 12, 2024. The CCAA Plans were unanimously approved by Affected Creditors voting in person or by proxy at each of the three Meetings and the double majority required by the CCAA was achieved for each CCAA Plan as follows:

(a) at the Imperial Meeting, the Imperial CCAA Plan was unanimously approved by 289,906 votes, representing $963,822,023,265 in total value of Voting Claims;
(b) at the RBH Meeting, the RBH CCAA Plan was unanimously approved by 289,904 votes, representing $963,296,023,265 in total value of Voting Claims; and
(c) at the JTIM Meeting, the JTIM CCAA Plan was unanimously approved by 289,904 votes, representing $963,296,023,265 in total value of Voting Claims.

[11] The Monitors now bring motions in each of the CCAA proceedings:

(d) for Sanction Orders approving and sanctioning the operative CCAA Plans, namely the Third A&R CCAA Plans dated February 27, 2025;
(e) authorizing and directing CCAA Plan Administrators, the Mediator and the Tobacco Companies to implement the CCAA Plans;
(f) approving the CCAA Plan Administration Reserve and the PCC Compensation Plan Reserve;
(g) an order releasing the Released Claims in respect of each Applicant, the Applicant Tobacco Company Group, the Monitors, the CCAA Plan Administrators, the Mediator and the other Released Parties, in accordance with the terms of the CCAA Plans;
(h) extending the Stay Period to the Effective Time;
(i) an order appointing Deloitte, FTI and E&Y as CCAA Plan Administrators; and
(j) ancillary relief.

[12] On March 3, 2025, the Monitors’ motions for CCAA Plan Amendment Orders were granted, which reflected an agreement reached by the Tobacco Companies to allocate a $750 million working capital holdback to RBH. In exchange, RBH, JTIM and JTIM-TM agreed to withdraw their opposition to this motion. The court’s endorsement, reported at 2025 ONSC 1375 dated March 3, 2025 is attached as Schedule “A”.

[13] For the following reasons, the motions are granted, which, among other things, sanctions the CCAA Plans, as amended.

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Schedule “A”

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Chief Justice Geoffrey B. Morawetz
Date: March 6, 2025