British American Tobacco pays $575m to settle legacy asbestos litigation

19th Dec 2014 07:22

British American Tobacco (BAT) is to pay out $575m to settle a legacy litigation case with a company involved in the production and sale of asbestos-containing products in the 1980s.BAT said on Friday that its subsidiary, Imperial Tobacco Canada, has reached an agreement with US group Flintkote for claims related to certain disputed dividends and existing and potential asbestos claims."Today's agreement in principle of the dividend claims and the asbestos related liabilities, brings this long running litigation to an end," BAT said.Flintkote was a division of Genstar Corporation which was later bought by Imperial Tobacco's corporate predecessor Imasco Limited in 1986. BAT said the asbestos company is a "former indirect corporate subsidiary".The litigation case, which has been going on since 2006, sought recovery from Imperial Tobacco Canada of certain dividends and other transfers received in 1986 and 1987 after Imasco acquired Genstar Corporation.BAT said that the settlement now "provides closure".Imperial Tobacco will now be able to "focus on its current business by finally and completely resolving the existing Flintkote litigation and obtaining protections from potential future litigation related to Flintkote", BAT said.