U.S. Tobacco Cooperative seeks approval of settlement with insurers

By Sarah Lizee

Olympia, Wash., March 29 – U.S. Tobacco Cooperative Inc. is seeking court approval of a settlement with its insurers, according to a motion filed Monday with the U.S. Bankruptcy Court for the Eastern District of North Carolina.

In August 2019, the company filed a complaint against some of its insurers seeking punitive damages assessed against the insurers based on their refusal to reimburse the company for losses. U.S. Tobacco said the insurers failed to reimburse about $14 million in losses incurred as a result of physical loss and damage to its tobacco product.

The parties participated in mediation in February.

Under the settlement agreement, the insurers have agreed to pay to the company a total of $21 million.

The company said 90% of the proceeds will be used to pay the Lewis class under its plan.

The settlement effective date must occur by June 7.

Raleigh, N.C.-based U.S. Tobacco is the largest tobacco cooperative in the United States. It filed bankruptcy on July 7, 2021 under Chapter 11 case number 21-01511.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.