Carolina Tobacco Applies to Become MSA Signatory
Published in CSP Daily News
Company files for Chapter 11
PORTLAND, Ore. -- Carolina Tobacco Co. (CTC), a privately held manufacturer of price-value cigarettes sold under the Roger and Kingsboro brands, has submitted its application to become a future signatory to the Master Settlement Agreement (MSA). The company also filed for Chapter 11, which is not expected to impact day-to-day operations, delivery of products to customers or its application to join the MSA.
The MSA is the accord reached in 1998 when the attorneys general of 46 states signed an agreement with the four largest tobacco companies in the United [image-nocss] States to settle pending state lawsuits.
CTC's application has been submitted to the National Association of Attorneys General (NAAG), which coordinates state enforcement of the MSA. David H. Redmond, president of CTC, met on Thursday, April 14, 2005, with NAAG and a number of MSA participating states representatives to discuss the recently submitted application.
When Portland, Ore.-based CTC's application is approved, each of the 46 U.S. states participating in the MSA will receive a portion of the several billion dollars in voluntary payments the company estimates it will make over the next 12 years as a Participating Manufacturer (PM) and signatory to the MSA.
Currently, payments under its status as a Non-Participating Manufacturer (NPM) are made into an escrow account. These accumulated escrow funds and other cash payments would also be awarded by CTC to the participating stateswhen the application is approvedresulting in a very substantial, one-time cash settlement amount that would be divided among the 46 states.
We feel the future growth and direction of our company warrants becoming a signatory. And, even without mandate, we already operate in the spirit of the MSA in how we manufacture and market our products, said Redmond. The approval of our application to become a Participating Manufacturer will bring new focus to CTC as we join in providing financial benefits to the participating states.
CTC also announced a financial restructuring intended to provide additional flexibility and to position itself for future growth. The Chapter 11 filing, implemented on April 18, 2005, is not expected to impact day-to-day operations, delivery of products to customers or its application to join the MSA. The Chapter 11 filing is intended to provide us with the flexibility to continue to provide our current level of service to customers as we navigate the application process as an NPM and become a signatory to the MSA as an SPM, said Redmond. We intend to work closely with the NAAG and the other parties to make the transition as smooth as possible.