Tobacco Farmers win a Judgment

Source from:  news.cincypost.com Associated Press 12/24/2007

A final judgment in a four-year-old lawsuit against Lexington-based Burley Tobacco Growers Cooperative Association will give thousands of current and former tobacco growers about $100 million. The judgment entered Wednesday will result in payments to more than 198,000 producers in Kentucky, Indiana, Ohio and West Virginia. In a statement, the co-op said about $50 million will be mailed to farmers in early January, but farmers' attorney Robert Maclin said he hopes to get the first checks out this year. Attorneys will receive 15 percent of the settlement and the eight original plaintiffs will each receive a special payment of $10,000. Farmers will receive equal shares of the remaining 85 percent. If the total reaches $100 million, farmers might eventually get about $430 each. Maclin said some farmers might get more than one set of checks because they sold their tobacco over the years under their own name or their farm's name and maybe a business name. About $70.3 million from the co-op is being held in trust, according to court documents. The rest of the $100 million would come primarily from sales of 3.6 million pounds of burley held by a court-appointed trustee and from tax refunds. "I feel like we got $100 million for the farmers that they weren't going to get, so I'm pleased" with the judgment, Maclin said. In its statement, the co-op also said it was pleased with the judgment because it would restore growers' confidence in its future. The lawsuit was filed on Dec. 31, 2003, against the co-op and 54 of its officers, directors and former directors. The plaintiffs asked the court to order the co-op to pay its members "tens of millions of dollars" held in reserve since at least 1992. The lawsuit also asked for an accounting of all funds handled by the co-op between 1982 and 2002. The co-op contended that it was required by the federal government to keep a large reserve to protect the federal Commodity Credit Corp. from losses on loans made by the co-op. Most of the counts in the original lawsuit had been dismissed and the co-op avoided being dissolved as requested by the plaintiffs, it said. With the end of the federal tobacco support program, a lot less burley is being sold at co-op auctions and the number of growers has declined sharply. Many of those who are left are growing burley under contracts with cigarette makers. "We have been working hard to attract foreign buyers for burley tobacco," said co-op President Roger Quarles. "We are in the process of concluding our current sale of co-op burley to China, and are cultivating relationships in Thailand and Indonesia, among other places. The co-op also has "downsized its administrative staff," headed by General Manager Brian Furnish, to become more competitive, Quarles said. Enditem