Farmers to share $100 million burley settlement
Dec 20, 2007—The Lexington (KY) Herald-Leader has reported Thursday that 198,000 past and present burley tobacco growers in four states - and their attorneys - will share an estimated $100 million under a final judgment entered Wednesday in their four-year-old lawsuit against the Lexington-based Burley Tobacco Growers Cooperative Association.
About $50 million will be mailed in early January to farmers in Kentucky, Indiana, Ohio and West Virginia, the co-op said in a statement, but Robert Maclin, attorney for the farmers said "we are hoping to get them (the first checks) out this year."
The attorneys will share 15 percent of the total and the eight original plaintiffs will receive a special payment of $10,000 each.
Farmers will receive equal shares of the remaining 85 percent. If the total reaches $100 million, farmers might eventually get about $430 each.
Some farmers might get more than one set of checks, Maclin said, 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 remainder 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.
Most of the counts in the original lawsuit had been dismissed and the co-op, which was formed in 1922, 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," he said.
The co-op also has "downsized its administrative staff," headed by General Manager Brian Furnish, to become more competitive, Quarles said.
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.
"This is a plot hatched to destroy this co-op," the group's attorney, John W. Bilby, told the court in 2005. A victory by the plaintiffs would be "economic suicide."
The lawsuit was first filed in Fayette District Court, but later transferred to Fayette Circuit Court, where Judge Pamela R. Goodwine issued the final judgment.
Dec 20, 2007—The Lexington (KY) Herald-Leader has reported Thursday that 198,000 past and present burley tobacco growers in four states - and their attorneys - will share an estimated $100 million under a final judgment entered Wednesday in their four-year-old lawsuit against the Lexington-based Burley Tobacco Growers Cooperative Association.
About $50 million will be mailed in early January to farmers in Kentucky, Indiana, Ohio and West Virginia, the co-op said in a statement, but Robert Maclin, attorney for the farmers said "we are hoping to get them (the first checks) out this year."
The attorneys will share 15 percent of the total and the eight original plaintiffs will receive a special payment of $10,000 each.
Farmers will receive equal shares of the remaining 85 percent. If the total reaches $100 million, farmers might eventually get about $430 each.
Some farmers might get more than one set of checks, Maclin said, 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 remainder 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.
Most of the counts in the original lawsuit had been dismissed and the co-op, which was formed in 1922, 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," he said.
The co-op also has "downsized its administrative staff," headed by General Manager Brian Furnish, to become more competitive, Quarles said.
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.
"This is a plot hatched to destroy this co-op," the group's attorney, John W. Bilby, told the court in 2005. A victory by the plaintiffs would be "economic suicide."
The lawsuit was first filed in Fayette District Court, but later transferred to Fayette Circuit Court, where Judge Pamela R. Goodwine issued the final judgment.
