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FRANKFORT, Ky. — North Carolina Superior Court Judge Ben Tennille today 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.
“I am pleased to hear that Judge Tennille released the tobacco settlement funds to the states,” Agriculture Commissioner Richie Farmer said. “This will restore funding for diversification and marketing projects, including the Kentucky Proud marketing program. This funding is vital to our efforts and those of the Agricultural Development Board to help farmers make the transition from a tobacco-dominated agriculture economy.”
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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