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!

Correct And Replace: R.J. Reynolds Receives Favorable Rulings From Arbitration Panel

WINSTON-SALEM, N.C., Sept. 13, 2013 /PRNewswire/ -- An arbitration panel has determined that R.J. Reynolds Tobacco Company is entitled to approximately $266 million in disputed payments the company made under the terms of an agreement, known as the Master Settlement Agreement (MSA), between cigarette manufacturers and state governments and certain territories.

The jurisdictions found not to have upheld the enforcement requirement were: Indiana, Kentucky, Maryland, Missouri, New Mexico and Pennsylvania.

"We are pleased that the arbitration panel found that six jurisdictions failed to meet their diligent enforcement obligations under the MSA," said Martin L. Holton III, executive vice president and general counsel for R.J. Reynolds. "Between today's rulings and a settlement reached with 22 jurisdictions earlier this year, R.J. Reynolds should recover nearly $400 million with respect to its 2003 NPM Adjustment claim."

The panel's award is the maximum remaining amount to which the company is entitled with respect to the 2003 adjustment.

The 2003 arbitration proceedings have been underway since July 2010. They involved a series of hearings focused on whether a given contested jurisdiction failed to "diligently enforce" certain statutes that required each jurisdiction to confirm that tobacco manufacturers that are not signatories to the MSA, known as Non-Participating Manufacturers (NPMs), made escrow payments on cigarette sales in their jurisdiction. Any jurisdiction that failed to diligently enforce its escrow statute would be exposed to a downward payment adjustment, known as the NPM Adjustment, provided for in the MSA.

Earlier in 2013, R.J. Reynolds and certain other tobacco manufacturers entered into a partial settlement of their NPM Adjustment claims relating to 2003 through 2014 with 22 jurisdictions. The amounts resulting from today's rulings are in addition to the more than $1 billion in credits already available to R.J. Reynolds by virtue of that earlier partial settlement, which was entered as a stipulated award by the arbitration panel on March 12, 2013.

The jurisdictions that lost in today's rulings, as well as all of the other jurisdictions that did not join the earlier partial settlement, remain subject to more than $3.7 billion in additional claims from the cigarette manufacturers relating to their enforcement efforts in 2004 and subsequent years. These additional claims will be the subject of future arbitration proceedings.

Holton added, "Our focus will now shift to pursuing arbitration of the company's 2004 NPM Adjustment claim against those jurisdictions 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 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

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