Ignoring warnings of lawsuits, two cigarette makers announced yesterday that they were withholding more than $750 million promised to Pennsylvania, New Jersey, and dozens of other states this year under the 1998 tobacco-settlement agreement.
With the deadline for the $6 billion total annual payment passing yesterday, the attorneys general of Pennsylvania and New Jersey said they were prepared to move forward with lawsuits, but would continue to negotiate with the two companies that failed to pay.
In statements released yesterday, the nation’s second-largest tobacco firm, R.J. Reynolds Tobacco Co., and number-three Lorillard Tobacco Co. said they were putting a percentage of their payments in “disputed payments accounts” because of market-share losses to smaller companies that were not part of the agreement.
The companies contend that a provision of the agreement allows them to pay less if the market share declined as a result of the deal. Read the entire Philadelphia Inquirer article here.