GREENSBORO, N.C., April 17 /PRNewswire/ -- Lorillard Tobacco Company
has this morning fulfilled its full annual payment obligation of $666
million under the Master Settlement Agreement (MSA) with respect to
payments due the signatory states. The MSA is an agreement reached in 1998
with 46 states and the major tobacco companies, and calls for annual
payments to the states, subject to certain adjustments and credits.
Lorillard paid approximately $558 million of its total payment on March
31, and completed its payment obligations today by paying an additional
$108 million. This last part of the payment is the subject of a dispute
between the company and the states under a provision of the MSA that
provides a credit against the company's annual payment for market share
losses to tobacco manufacturers not bound by the agreement. Lorillard
fulfilled its contractual obligations by paying the amount in dispute into
an account established under the MSA for such purpose.
Under the terms of the MSA, a two-phase arbitration process was
established to resolve the question of lost market share. As part of Phase
I, on March 28 an independent economics firm found that the MSA was a
significant factor in the loss of market share by companies that
participate in the MSA to non-participating manufacturers. The decision by
the economics firm is final and entitles Lorillard to the credit on its
payments. Phase II of the process requires that an arbitration panel be
constituted to decide which states have diligently enforced certain
statutes required by the MSA. The states dispute this arbitration
mechanism, despite a ruling by two state courts agreeing with the company.
Lorillard is prepared to swiftly and fully complete the arbitration process
provided for.
"Lorillard has fulfilled all of its commitments under the MSA, and has
made payments of more than $3 billion since the inception of this
agreement. By making this payment today, we are again upholding our end of
the bargain, and expect the states to do the same," said Ronald S.
Milstein, Senior Vice President and General Counsel of Lorillard.
SOURCE Lorillard Tobacco Company
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Related links:
http://www.lorillard.com
CONTACT:
Ron Milstein, Senior Vice President, Legal
and External Affairs of Lorillard Tobacco Company,
+1-336-335-7718
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