Philip Morris Says $12B Appeal Bond Could Prove Devastating

Albanese, Elizabeth
April 2003
Bond Buyer;4/1/2003, Vol. 344 Issue 31605, p1
Trade Publication
tate attorneys general may intervene in a lawsuit against Philip Morris USA Inc. because of concerns that a 12 billion dollars court-ordered appeal bond could force the company into bankruptcy and jeopardize payments owed to states under the 1998 Master Settlement Agreement (MSA) with major tobacco companies. There are 19.85 billion dollars of tax-exempt tobacco bonds outstanding, most of which are backed solely with payments made by Phillip Morris and other tobacco companies under the MSA. With the stock of Philip Morris' parent company, Altria Group Inc., dropping 2.17 to 29.96, tobacco bonds were also trading cheaper.Altria told state attorneys general that it would be impossible for the firm to pay the appeal bond ordered by an Illinois judge as a requirement for the company to appeal a 10.1 billion dollar verdict in a lawsuit in which plaintiffs alleged they were misled into believing that light cigarettes are better for their health than regular ones.


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