Tobacco firm JTI-Macdonald obtains creditor protection after Quebec court ruling

JTI-Macdonald Corp. says it's been granted creditor protection following a Quebec Court of Appeal decision upholding a landmark judgment ordering it and two other companies to pay billions of dollars in damages to Quebec smokers.

The tobacco firm says the protection under the federal Companies' Creditors Arrangement Act (CCAA) will allow it to continue its business activities while it's liable for up to $1.77 billion to smokers who fell ill or were addicted.

Imperial Tobacco, JTI-Macdonald and Rothmans-Benson & Hedges had appealed a ruling that found the companies chose profits over the health of their customers.

In June 2015, Quebec Superior Court Justice Brian Riordan ordered the companies to make payments of more than $15-billion to smokers. 

At the time, the ruling was believed to be the biggest class action award in Canadian history.

Rothmans-Benson & Hedges denounced the judgment and said it would seek leave to appeal to the Supreme Court of Canada.

JTI-Macdonald says the appeal's court decision forced it to take the legal step to protect 500 Canadian jobs and continue its business with minimal disruption while it takes all appropriate measures to defend its business against a ruling it fundamentally disagrees with.

It says Canadians have had a very high awareness of the health risks of smoking since the 1950s that has been reinforced by printed health warnings on packages for 47 years.