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March 17, 2021
MINNEAPOLIS — Minnesota has settled its lawsuit against R.J. Reynolds Tobacco and ITG Brands over payments from the landmark 1998 agreement and should receive at least $81 million, state Attorney General Keith Ellison said Wednesday.
A Minnesota court in 2019 ruled in favor of the state, which argued that because of a brand-transfer issue the tobacco company wrongfully failed to pay millions of dollars.
Reynolds merged with Lorrilard tobacco in 2015. As part of that merger, Reynolds transferred the KOOL, Maverick, Salem and Winston brands to ITG Brands, which was not part of the 1998 settlement. Reynolds then stopped including those brands in calculating its payments.
Under terms of the settlement, the state will receive a full back payment for the unpaid obligations from 2015-20 and ITG Brands will assume the obligation to make payments on the transferred brands going forward.
Annual payments to the state are expected to be “at least $10 million for the foreseeable future,” Ellison said in a release. The money will go into the state’s general fund.
