A New York bankruptcy judge has given the green light to one of the largest cross-border corporate restructurings in Canadian history, approving U.S. recognition of Imperial Tobacco Canada Ltd.’s multibillion-dollar settlement tied to tobacco lawsuits.
Judge Grants Chapter 15 Approval
On Tuesday, U.S. Bankruptcy Judge John P. Mastando III granted Chapter 15 recognition to Imperial’s restructuring plan without objection during a brief hearing. The recognition marks a critical step in a CA$32.5 billion ($23.59 billion) settlement deal resolving sprawling Canadian tobacco litigation.
“This is the culmination of one of the largest, if not the largest, restructurings in Canadian history,” said Jennifer Feldsher of Morgan Lewis & Bockius LLP, representing Imperial’s U.S. interests.
Decades of Litigation and a Billion-Dollar Reckoning
Imperial, alongside fellow Canadian tobacco giants JTI-Macdonald Corp. and Rothman Benson & Hedges Inc., entered insolvency proceedings in 2019 under the weight of CA$1 trillion in claims alleging decades of tobacco-related injuries.
After years of mediation—stalled at length by the COVID-19 pandemic—a groundbreaking settlement emerged in 2024. The three companies agreed to create a CA$32.5 billion fund designed to pay out class action claimants and reimburse provincial governments for health-care costs linked to smoking.
