U.S. Tobacco Deal Wins M&A Advisor Award

Wednesday, November 16, 2022

Cozen O'Connor is proud to announce that its representation of U.S. Tobacco Cooperative Inc. (USTC) has been recognized with the Consumer Staples Deal of the Year at the 2022 M&A Advisor - Future of Dealmaking Summit. USTC is a grower-owned marketing cooperative based in Raleigh, North Carolina. USTC and its affiliates were represented by Cozen O'Connor's Bankruptcy, Insolvency & Restructuring attorneys Mark Felger (Wilmington), Simon Fraser (Wilmington), David Doyle (Chicago),  and Chrissy Sanfelippo (Chicago).

The cooperative filed for Chapter 11 bankruptcy protection in July 2021 in order to satisfy contractual obligations to its 550-plus member-growers, 200-plus employees, suppliers, and customers while facing a 17-year-long class-action lawsuit. The Lewis Class, which purported to represent over 800,000 membership interests of current and former tobacco producer-members, was asserting a $1 billion claim against the cooperative and a constructive trust over all of its assets, with a lengthy interlocutory judgment to support its contentions. On February 2, 2022, after conducting 30 hours of mediation, the team was able to reach economic terms of a comprehensive settlement with the Class.

After securing $130 million in exit financing, and resolving disputes with numerous interested parties, Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the Eastern District of North Carolina ultimately approved the cooperative’s fully consensual Chapter 11 plan of reorganization on June 23, 2022. Under the settlement, USTC will initially pay over $60 million into a fund for the benefit of the class of hundreds of thousands of members and pay its secured lenders, suppliers, and unsecured creditors in full.

The settlement allows USTC to move on from the proceedings and focus on the future. “Our exit allows us to now focus solely on the services and products our Cooperative is known for," USTC CEO Oscar J. House shared in a statement. “Our business is robust with our farmer members contracting for this fall’s harvest, customers ordering our products, and shipments processing daily. With our experienced management team, dedicated employees, and our strong market position, the cooperative is poised for a successful future.”

About the M&A Advisor Awards

The M&A Advisor recognizes excellence, presents thought leadership, and facilitates connections among the world's leading dealmaking professionals. The Annual M&A Advisor Awards recognize the leading M&A transactions, restructurings, deal financings, products/services, firms, and professionals. The award winners were honored at the black-tie soiree during the 2022 Future of Dealmaking Summit on November 15, 2022. Click here to learn more about the awards.

About Cozen O’Connor Bankruptcy, Insolvency & Restructuring

Cozen O’Connor’s  bankruptcy attorneys have extensive trial and deal-making experience and move easily between the courtroom and the conference room. Whether overseeing a Chapter 11 case on behalf of a creditors’ committee, declaring insolvency, executing an out-of-court restructuring, or lodging a cross-border complaint, bankruptcy-related matters move fast. The practice is structured to facilitate prompt team formation, which allows the firm to get up and running without delay.

About Cozen O’Connor

Established in 1970, Cozen O’Connor has more than 825 attorneys who help clients manage risk and make better business decisions. The firm counsels clients on their most sophisticated legal matters in all areas of the law, including litigation, corporate, and regulatory law. Representing a broad array of leading global corporations and middle market companies, Cozen O’Connor services its clients’ needs through 32 offices across two continents.



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