US Tobacco Cooperative Inc. (USTC) has filed for Chapter 11 protection in Federal Court for the sole purpose of meeting short-term contractual obligations to member-growers during crop season 2021, USTC said in a statement.

“This filing provides us the best way possible to meet our short-term obligations and plan for the future,” said Oscar J. House, CEO and President of US Tobacco Cooperative. “In no way does this action reflect on the health of the organisation and its ability to continue operations well into the future. In fact, this action is in response to the uncertainty presented by the ongoing class action litigation brought against us in 2005. Rest assured that our obligations to our member-growers, employees, suppliers and customers have always been and will continue to be our highest priority and concern.”
As a result of this proactive filing, USTC intends to satisfy obligations to its 550+ member-growers and 200+ employees. According to the statement, this filing will allow USTC to reorganise and restructure to honour commitments to stakeholders and ensure the organisation’s sustainable future.
According to Thomson Reuters, Chapter 11 (also known as Chapter 11 reorganisation proceedings and sometimes referred to as "bankruptcy protection") refers to the chapter of the US Bankruptcy Code that sets out the statutory procedure for reorganisation proceedings under US bankruptcy law.