Missouri, the last remaining state in which nonparticipating manufacturers can obtain allocable share releases from their escrow payments, has again introduced legislation to repeal the release mechanism. The bill, Senate Bill 629, was introduced earlier this month.
The allocable share repeal has been introduced in Missouri in prior years. It was narrowly defeated in 2002 and 2006. In 2011 and 2012, a coalition of small wholesalers and retailers defeated the attempted repeal of the release provision.
The major tobacco companies have relied on Missouri’s failure to repeal the allocable share release provision to withhold settlement payments under the MSA. A proposed settlement of the major tobacco companies’ payment dispute would compel signatory states to repeal the allocable share provision, or forfeit ongoing payments. According to press reports, Missouri has not signed the settlement agreement.