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SPRINGFIELD, Illinois -- The Illinois Supreme Court has agreed to hear Philip Morris' appeal of a $10.1 billion verdict in a class-action lawsuit claiming the company misled smokers about the dangers of light cigarettes.
The court Tuesday also kept the appeal bond that the tobacco giant must post at about $6 billion, rather than the $12 billion set initially. Philip Morris argued the higher bond would drive it into bankruptcy and force it to default on a $206 billion, 25-year nationwide tobacco settlement the Associated Press reported.
The bond had damaged the credit rating of Philip Morris' parent company, Altria Group, and forced it to cancel a share repurchase program. The prospect of losing the settlement money also worried state officials across the country. The court's orders, issued without written opinions, are the latest in a post-trial battle that started with a March decision by state Judge Nicholas Byron to charge the company $10.1 billion for misleading Illinois smokers into believing light cigarettes are less harmful than regular brands.
Plaintiffs want the company to post $14.64 billion in cash or surety bonds to secure the judgment and cover interest and costs while appeals proceed, the report said. Byron initially ordered Philip Morris to post a $12 billion bond, but later reduced that by nearly half after Philip Morris said it would be driven out of business.
An appeals court then ordered the judge to reconsider the reduction, but the state Supreme Court has now blocked that, keeping the bond at its reduced level of about $6 billion. The court's agreement to hear the company's appeal -- something it had declined to do in the past -- means the case skips the appellate level.
William Ohlemeyer, Philip Morris USA vice president and associate general counsel, said the decision "is in the best interest of all parties involved because it expedites the ultimate resolution on the merits."