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FRANKFORT, Ky. — Agriculture Commissioner Richie Farmer applauded North Carolina Superior Court Judge Ben Tennille’s order for tobacco companies to make Phase II payments, with interest, for the fourth quarter of 2004. Earlier this month Judge Tennille lifted a stay prohibiting distribution of 2004 Phase II tobacco settlement payments. Judge Tennille authorized the fund trustee to pay the first $114 million of Kentucky’s share directly to the Commonwealth of Kentucky.
“This is another important ruling for Kentucky’s agricultural diversification efforts,” Agriculture Commissioner Richie Farmer said. “This funding will give the Department and the Agricultural Development Board more resources to help Kentucky farmers who are looking for alternatives to tobacco.”
The North Carolina Supreme Court in August ruled that tobacco companies were obligated to make their 2004 Phase II payments. The tobacco companies had withheld the payments after the tobacco quota buyout was signed into law a year ago, contending the buyout released them from their obligation to make the 2004 payments. Judge Tennille ruled in favor of the tobacco companies last year before the state supreme court overturned his ruling and sent the case back to his court.
Earlier this year the Kentucky General Assembly passed legislation making the Phase II payments to Kentucky tobacco growers and quota owners from Phase I money and bond funds as a substitute for the Phase II funds. The legislation provided for the state to be reimbursed if the tobacco companies ultimately made the 2004 Phase II payment.
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