Jump to full article: Bloomberg News, 2007-01-31
Author: Chris Burritt
Intro: Altria Group Inc., parent of the world's largest cigarette maker, will spin off Kraft Foods Inc. on March 30, saying the unit will grow more quickly as an independent company.
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Altria's board decided last year to proceed with the restructuring after rulings in a U.S. Justice Department racketeering suit in Washington and two cases in Florida and Illinois went the company's way.
In November, a federal appeals court in New York allowed Altria's Philip Morris USA and other cigarette makers to appeal a judge's decision to let light-cigarette smokers seeking $200 billion in damages sue as a group. The decision delayed the case, which represents the biggest potential legal liability for the tobacco industry.
The ruling emboldened Altria to proceed with spinning off Kraft even as lawyers for the smokers considered trying to block the transaction, arguing the food assets may be needed to cover a potentially large award, investors said.
Camilleri told analysts today he has ``no idea'' whether lawyers in the light cigarettes case may seek an injunction.
``If I was on the other side, I don't think I would do it,'' Camilleri said. An injunction claim would have ``no merit,'' he said.
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