U.S. Tobacco Cooperative Plans Exit From Chapter 11 Bankruptcy This Summer
The cooperative has reached settlement terms in a class-action lawsuit.
RALEIGH, N.C. — U.S. Tobacco Cooperative Inc. (USTC) has begun planning an exit from Chapter 11 bankruptcy this summer.
The cooperative filed for protection in July 2021 to meet contractual obligations to its member-growers while the company faced uncertainty presented by an ongoing class-action lawsuit, as Convenience Store News previously reported
"On Feb. 2, after 17 years of litigation, we were able to reach economic terms of a settlement with the Lewis Class," said Oscar J. House, CEO of USTC. "As we await final approval from the court this summer, we are beginning to prepare our exit from bankruptcy and continue providing the exceptional service and quality products our organization is known for across the globe."
USTC originally filed for protection in federal bankruptcy court to satisfy obligations to its 550-plus member-growers, 200-plus employees, suppliers and customers. The settlement and plan of reorganization will allow the cooperative to honor its commitments worldwide and emerge from bankruptcy well-positioned to serve its member-growers, USTC stated.
"USTC is healthy and set for a sustainable, successful future," noted House. "Throughout the bankruptcy process, we have fulfilled all obligations to all stakeholders: our customers, grower-members, vendors and employees. Going forward, we will continue to do so, stronger than ever."
Raleigh-based USTC is a grower-owned marketing cooperative. The cooperative processes U.S. flue-cured tobacco grown by its member-growers in Florida, Georgia, South Carolina, North Carolina and Virginia. Member-grower tobacco is processed and sold as raw materials to cigarette manufacturers worldwide. Subsidiaries of USTC include U.S. Flue-Cured Tobacco Growers, Premier Manufacturing, Franchise Wholesale (dba Wildhorse Distributing), Big South Distribution and King Maker Marketing Inc.
USTC, through its subsidiaries, also produces consumer products for the U.S. market under the brand names of Wildhorse, 1839, Manitou, Shield, 1st Class, Ultra Buy and Traffic.