This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Philip Morris USA And Other Manufacturers Prevail In Decade-Long Settlement Payment Dispute

An arbitration panel has determined that 6 out of 15 states failed in 2003 to diligently enforce laws that require escrow payments from the cigarette manufacturers that have not signed the Master Settlement Agreement (MSA). The states enacted these Non-Participating Manufacturer (NPM) escrow laws after the MSA was signed in 1998. Manufacturers that participate in the MSA, such as Philip Morris USA (PM USA), receive downward adjustments in their MSA payments if, among other things, states fail to diligently enforce NPM escrow laws.

As a result, Philip Morris USA expects to receive a credit of approximately $145 million, plus interest, against next year’s MSA payment. This was the full remaining amount available to PM USA in the 2003 arbitration.

“Today’s decision sends a strong message about the importance of diligently enforcing the laws that apply to non-participating manufacturers,” said Denise Keane, executive vice president and general counsel of Altria Group, speaking on behalf of PM USA.

The panel’s decision does not affect the 22 states and jurisdictions that joined a December 2012 settlement of the NPM adjustment disputes. “The non-diligent states could have avoided today’s result altogether had they either diligently enforced their escrow statutes or joined December’s settlement of these issues,” said Ms. Keane.

States that joined this settlement received more than $1 billion in net additional cash payments from the release of their portion of disputed MSA funds that had been set aside in a separate account. In addition, these states are protected from any further downward adjustments in their MSA payments based on NPM adjustment disputes for the years 2003 through 2012. States that did not join the December 2012 settlement still face NPM adjustment disputes for years 2004 through 2012.

Ms. Keane added, “We are fully prepared to move forward with the arbitration for the 2004 dispute, and for all of the remaining years as well. That being said, we remain open to resolving these disputes in a way that makes sense for us and the states that did not join the settlement.”

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,105.54 -1.16 -0.01%
S&P 500 1,997.20 -2.82 -0.14%
NASDAQ 4,564.5120 -6.1250 -0.13%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs