ITG Brands sued RJ Reynolds Tobacco over Master Settlement Agreement (MSA) payments on four cigarette brands the Imperial Brands subsidiary bought from RJRT in 2015, the Winston-Salem Journal reported.
ITG acquired Kool, Salem, Maverick and Winston as part of the Reynolds American acquisition of Lorillard and its Newport brand. Reynolds shed the four brands to smooth the path to regulatory approval of the Lorillard takeover.
ITG brought suit in the Court of the Chancery in Delaware, saying it had reached agreement with Mississippi on future MSA payments for the four brands but was unable to reach agreement with three other states, including Florida, the Journal said. ITG is asking the court to uphold its assertion that it is not responsible for future MSA payments in Florida, according to the Journal. Florida has filed an enforcement action against both companies to obtain MSA payments, the newspaper said.
MSA obligates participating tobacco companies to make payments to states for healthcare costs incurred from smoking related diseases.