Canada’s largest, most complex restructuring plans to date are in effect

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

Davies acts for FTI Consulting Canada Inc. as the court-appointed CCAA Monitor of Imperial Tobacco and its affiliates in the CCAA proceedings, as well as in the Chapter 15 U.S. Bankruptcy Code proceedings in the Southern District of New York. In that capacity, Davies assisted the Court-Appointed Mediator and Monitors in effecting the landmark CCAA plans that led to the historic C$32.5-billion settlement of tobacco-related liabilities. Davies also acts for FTI  in their role as Plan Administrators for those Plans.

The implementation of these CCAA plans marks the conclusion of decades-long litigation and Canada’s largest, most complex restructuring to date. Initial payments began at the end of August and 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.

The Davies 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)