Make your own free website on Tripod.com



The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.

 

B.A.T Shares Fall After Florida Jury Awards Punitive Damages

London, June 11 (Bloomberg) -- B.A.T Industries Plc's shares fell as much as 5 percent after the world's second-largest cigarette maker suffered a rare U.S. legal defeat.  

Shares fell as much as 31 pence to 575p after a Florida jury ordered its U.S. unit Brown & Williamson to pay both compensatory and punitive damages to the family of a smoker who died of lung cancer -- the first time a jury has ever awarded punitive damages against a tobacco company. Philip Morris Cos., the world's largest cigarette company, and RJR Nabisco Holdings Corp. shares also fell in late New York trading.  

The defeat, the tobacco industry's third in four decades, comes just one day before B.A.T shareholders are scheduled to vote to create a tobacco company that will be separate from its insurance and asset management units. Meanwhile, U.S. senators yesterday improved the chances of passing a controversial tobacco bill -- opposed by the industry -- by attaching a tax-cut for married couples.  

I don't think that this is in any sense a floodgate that is going to signal a rash of punitive damages against the industry,'' said Tim Young, an analyst at SG Securities in London. ``Having said that it is the first time that punitive damages have been awarded. I was expecting a bit more of a dip in B.A.T's share price.''     

Louisville, Kentucky-based Brown & Williamson, whose brands include Kool and Carlton, will appeal on the basis that the jury saw documents that shouldn't have been introduced at the trial, said company attorney John Nyhan.   

Punitive Damages'     

SG Securities' Young lowered his recommendation on B.A.T shares to ``hold'' from ``buy'' earlier this year when Arizona Republican Senator John McCain introduced his bill into Congress, effectively sinking a June 1997 agreement the industry had reached with a group of state governments that would have cost it less money and given it more legal protection.  

Young said he thinks its ``very unlikely'' that Congress will approve the McCain bill, even in its sweetened form. But he said the lack of a settlement agreement leaves B.A.T plagued by investor fears over the ever-expanding pile of lawsuits from cancer victims and health insurers.  

It's undoubtedly true that it will continue to provoke volatility in its share price, doubly more so when B.A.T is a pure tobacco company,'' he said.  

B.A.T shareholders vote tomorrow on whether to split the company into two separate businesses -- a move aimed at helping it focus on its tobacco business and to free the financial services units from legal payments related to tobacco lawsuits and settlements. Under the proposal, which isn't expected to meet any opposition, the tobacco business will be listed later this year as British American Tobacco Plc.  

The insurance and asset management businesses, which include Allied Dunbar, Eagle Star, and Farmers Insurance, will be merged with Switzerland's Zurich Insurance Co. Shares in the combined company, called Zurich Financial Services AG, will be listed in Zurich as Zurich Allied AG and in London as Allied Zurich Plc.  

B.A.T shareholders, who will own 43 percent of Zurich Financial Services, will receive one Allied Zurich share and one British American Tobacco share for every two B.A.T shares they own. 

05:49:20 06/11/1998

 

Attention! All information contained herein is for educational purposes only. No copyright infringement is intended by any material on these pages. The copyrights of the whole multimedia content on these pages are belonging to their originators, authors, creators... etc. All original content is the property of it's originators. Copyrighted material has been used for non-commercial purposes only. This website is best viewed with your monitor resolution set to 800x600 and your video mode set to true color.