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Partial Settlement Reached In Dispute on Future of Burley Tobacco Growers Cooperative Association

The parties involved in Haynes Properties, LLC, et al v. Burley Tobacco Growers Cooperative Association, Fayette Circuit Court; Case No. 20-CI-00332, in which the Plaintiffs, among other claims, sought the dissolution of the Burley Tobacco Growers Cooperative Association, have agreed to a partial settlement of the dissolution claims, pending approval by Fayette Circuit Court, providing for the end and dissolution of the Co-Op.

Terms of this partial settlement of the litigation include:

  • The Co-Op’s assets will be liquidated and net proceeds distributed equally among members (those active in any crop year from 2015 through 2019) after payment of administrative costs, and fees and expenses of attorneys. The first distribution should occur before the end of 2020.

  • The dissolution of the Co-Op will be managed by a six-member dissolution committee –Penny Greathouse, Mitch Haynes and Gregg Craddock who are members of the Co-Op involved in the litigation, and Al Pedigo, Eddie Warren and Donald Mitchell, Co-Op directors.

  • $1.5 million of the Co-Op’s assets will be designated for the creation of a new agricultural-related non-profit entity whose mission will include:

  • Serving as liaison for tobacco growers with leaf dealers and tobacco purchasers;

  • Advocating for producers/growers and land-owners in production of tobacco;

  • Providing services and support for education and research beneficial to growers of all types of tobacco.

The special meeting of members to vote on dissolution that was postponed because of Coronavirus guidelines and concern for members’ safety will no longer be necessary.

Page 2 – Joint news release

Founded in 1921, the Co-Op initially enabled tobacco growers to market their crop directly to manufacturers. The Co-Op also played a critical role in implementing the U.S. Federal Tobacco Price Support Program from 1941 until 2004, when the program was eliminated.

Representatives of both sides in the litigation agreed the settlement is a win for tobacco and agriculture in general in these challenging times. In addition to members receiving their shares of the Co-Op’s assets, tobacco growers of all varieties, will have an opportunity to create a new, more relevant organization for the future – an entity that will advocate for growers and land-owners, and support education and research beneficial to growers.

“There was no perfect solution to this issue, but this settlement was the right solution,” said Co-Op president Al Pedigo. “It’s a healthy compromise and now we need to move on. The Co-Op has a 99-year history of helping growers. But many of us agree it’s time to change directions.”

Penny Greathouse, one of the Plaintiff class members, whose family has long history of tobacco production in Central Kentucky and as members of the Co-op, stated “this partial settlement was a long and hard process whose time had finally come, and I am thankful for the hard work of our attorneys in seeing this through, as well to the work of the Co-Op’s own attorneys; I too look forward to closing this chapter”.

In a joint statement, Pedigo and Greathouse said: “Tobacco growers everywhere share many of the same concerns. With this behind us, growers can work on finding shared solutions for those shared concerns. In the long-term, that is the most important part of this settlement.”

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