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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27064
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| Title: | Wealth Creation and Destruction from Brooke Group's Tobacco Litigation Strategy |
| Authors: | Dahiya, Sandeep
Yermack, David |
| Issue Date: | Dec-1999 |
| Series/Report no.: | FIN-99-050 |
| Abstract: | We examine value creation and destruction in the tobacco industry due to
the radical litigation strategy pursued by Brooke Group and its CEO,
Bennett LeBow. Brooke Group has a tiny market share, low margins, high
leverage, and a high concentration of management ownership.Beginning in
1996 the firm reached settlements in lawsuits brought against all
cigarette companies by class action plaintiffs and U.S. state
governments. Brooke Group's actions, which included promises to
cooperate in litigation against its rivals, spurred other companies to
reach settlements on less favorable terms. The settlements eventually
led to massive wealth destruction within the tobacco industry but
impressive returns for shareholders of Brooke Group. |
| URI: | http://hdl.handle.net/2451/27064 |
| Appears in Collections: | Finance Working Papers
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