US tobacco co-op plans to pull out of bankruptcy after class action lawsuit
The settlement and reorganization plan will enable the cooperative to honor its commitments worldwide and emerge from bankruptcy well positioned to serve its member-producers.
After initially filing for protection in July 2021, US Tobacco Cooperative (USTC) began planning for an exit from Chapter 11 bankruptcy later this summer. The cooperative filed for protection to meet its contractual obligations to its member-producers while the company faced the uncertainty presented by an ongoing class action lawsuit.
“On February 2, after 17 years of litigation, we were able to reach economic terms of a settlement with the Lewis class,” said USTC CEO Oscar J. House. “As we await final court approval this summer, we begin preparing to emerge from bankruptcy and continue to provide the exceptional service and quality products our organization is known for around the world.”
The USTC originally filed for protection in federal bankruptcy court to satisfy obligations to its more than 550 producer members, more than 200 employees, suppliers and customers. The settlement and reorganization plan will enable the cooperative to honor its commitments worldwide and emerge from bankruptcy well positioned to serve its member-producers. Details of the settlement will be provided in the normal course of obtaining formal court approval of the USTC settlement and reorganization plan.
“USTC is healthy and poised for a sustainable and prosperous future,” House continued. “Throughout the bankruptcy process, we have fulfilled all our obligations to all stakeholders: our customers, our producer members, our suppliers and our employees. In the future, we will continue to do so, stronger than ever.
US Tobacco Cooperative is a producer-owned marketing cooperative located in Raleigh, North Carolina. The cooperative processes American air-cured tobacco grown by its more than 550 member growers in Florida, Georgia, South Carolina, North Carolina and Virginia. Tobacco from producer members is processed and sold as raw material to cigarette manufacturers around the world. USTC subsidiaries include US Flue-Cured Tobacco Growers (USFC), Premier Manufacturing, Franchise Wholesale (d/b/a Wildhorse Distributing), Big South Distribution and King Maker Marketing. The USTC, through its subsidiaries, also manufactures consumer products for the US market under the Wildhorse, 1839, Manitou, Shield, 1st Class, Ultra Buy and Traffic brands.