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Health insurers and other opponents of a class-action settlement worked out in an Alabama courtroom for Liggett Corp. said the tobacco firm is capable of paying more under the pact.
But Liggett attorneys said damage verdicts could bankrupt the firm.
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In a fairness hearing on the settlement today in Alabama Circuit Court in Mobile, accountant and turnaround expert Christopher Kearns of New York's Kahn Consultants said Liggett, with about $54 million in pretax earnings for 1998, does not have the resources to face mounting numbers of smoker suits. ``Clearly (the claims) would force Liggett into bankruptcy, to seek protection under Chapter 11,'' Kearns told Judge Robert Kendall.
Brooke Group Ltd. (NYSE: BGL - news) announced today that it has declared a regular quarterly cash dividend on its common stock of $0.075 per share, payable June 30, 1999, to holders of record as of June 23, 1999.
Residents and officials of this community say it's no surprise Liggett & Myers chose to relocate to their small city just across the Alamance County line from Orange.
After all, says City Council member Bob Hupman, Mebane has the best diversity of industry in the state, the best schools in the state and one of the best community colleges in the state. . . City officials have been working for years to attract diverse industry to the community.
"Liggett played a big part in the social and financial aspects of Durham," said Beavers, 52, who now works in security at Duke University. "Those were the good old days. I hope for the best for them and the ones that are still there. I look back on it as the best work days I've ever had."
1822: The grandfather of John Edmund Liggett opens a snuff shop in Belleville, Ill. . . 1986: New York investor Bennett S. LeBow, 49, acquires the Liggett Group in a leveraged buyout from GrandMet USA for $137 million. [Strangely, no mention in this timeline of Liggett's turn against the rest of the industry, its 1997 settlement of state lawsuits, its cooperation with prosecutors, nor its historic statement: "We at Liggett know and acknowledge that, as the Surgeon General and respected medical researchers have found, cigarette smoking causes health problems, including lung cancer, heart and vascular disease and emphysema. Liggett acknowledges that the tobacco industry markets to 'youth,' which means those under 18 years of age, and not just those 18-24 years of age."]
For years, as its market share dwindled to 1 percent and its work force shrank to 300, from 1,700 at the beginning of this decade, many observers wondered how low Liggett could go.
Now, Liggett is back, at least as far as investors are concerned. But there are still perils. . . Now, analysts have trained their attention on the federal courthouse in Mobile, Ala., where a hearing is set for Thursday to give final approval to a separate class-action settlement costing Liggett 7.5 percent of pretax income for 25 years. The money would help pay the medical bills of sick smokers.
The company said in a May 17 filing with the U.S. Securities and Exchange Commission that it thinks a settlement in the Alabama case may thwart the filing of lawsuits and end the market's jitters over Liggett's potential liability.
Liggett Group, the last remaining manufacturer of cigarettes in the town tobacco built, said Friday that it will move its tobacco production operation to a modern plant in Mebane. More than 200 of the 300 employees working in Liggett's eight-building campus will be asked to transfer to the new plant.
Liggett said three weeks ago that it was looking at the Mebane plant because it couldn't continue to produce cigarettes profitably in the decades-old campus of brick buildings along West Main Street downtown.
So they've come from thousands and thousands of employees down to this. . . You never dreamed that this would happen. You always thought these businesses would be here. NC state Sen. Jeannie Lucas, a Durham native whose parents worked for Liggett, which is moving its manufacturing from Durham to a smaller plant in Mebane. Quoted in <i>Liggett moving plant</i>
Brooke Group Ltd. announced today that a newly formed entity controlled by its wholly-owned subsidiary, Liggett Group Inc., has signed an agreement to purchase an industrial facility in Mebane, North Carolina from 3C Alliance L.L.P.
The Mebane facility is an approximately 240,000 square foot manufacturing facility located on 42 acres at 100 Maple Lane in Mebane, North Carolina. Liggett plans to relocate its tobacco manufacturing operations from Durham, North Carolina to the Mebane facility, which is approximately 30 miles from Durham.
Brooke Group Ltd., the cigarette maker controlled by financier Bennett LeBow, paid about $148 million to cut its outstanding debt by more than half.
The company on Tuesday repurchased its 15.75 percent senior secured notes due in 2001 for $147.7 million, including interest that had accrued, the company said in a regulatory filing. The notes had a face value of $151 million, the company said. The repurchase leaves Brooke with about $125 million in debt.
Philip Morris Cos. Inc. will drop Liggett Group's special warning that smoking is addictive from the packaging on three cigarette brands it has purchased from the rival tobacco company. The statement -- ``Warning: Smoking is Addictive'' -- is currently emblazoned on all Liggett's U.S. brands in addition to the standard U.S. Surgeon General's health warning carried on all cigarettes sold in the United States.A Philip Morris spokeswoman on Monday said that when the No. 1 U.S. cigarette maker begins shipping the Chesterfield, L&M and Lark brands in the United States as its own on Wednesday, the special Liggett warning will not appear on the packaging. [You can still see the L&M label here--gb]
Brooke Group Ltd. (NYSE: BGL - news) today announced that Philip Morris has closed on the exercise of an option to buy three of Brooke's subsidiary Liggett Group's cigarette brands, L&M, Chesterfield and Lark. At the closing, Liggett received $145 million.
Brooke Group Ltd. (NYSE: BGL - news) today reported financial results for the 1999 first quarter ended March 31, 1999.
First quarter 1999 revenues were $108.4 million compared to revenues of $84.8 million in the 1998 quarter. The Company recorded operating income of $22.1 million in the 1999 first quarter compared to operating income of $7.5 million in 1998. The Company recorded income of $7.6 million from continuing operations in the first quarter of 1999 compared to a loss of $17.4 million in the 1998 period. Net income was $8.8 million, or $0.34 per diluted common share in the 1999 first quarter, compared to net loss of $17.4 million, or $0.89 per diluted common share in the 1998 period.
They look at more opportunities for downtown condominiums or apartments, a museum of Durham's history, more shops and offices for those wanting a piece of Brightleaf's upscale clientele, and perhaps more parking. City Manager Lamont Ewell has pegged one building, the Walker warehouse, as the city's next downtown hub for trains, buses and taxis, though a second site also is under consideration.
"Personally, I don't see a downside here," said Joel Kostyu, a commercial real estate broker in Durham. "There might be some temporary downside as Liggett closes, but I don't see one as far as improving the vitality for downtown."
Liggett employs about 300 people at the campus. It is the last cigarette manufacturer in a town that owes its existence to tobacco processing.
If it does so, the Bull City will be completely out of the cigarette business. The company is considering a smaller Mebane site. . . If Liggett does leave, it would take a big piece of Durham's history with it. Tobacco was the driving force of the Bull City's economy most of this century. Tobacco dollars built Duke University and its world-class medical center.