Can Altria Go Through with Its Planned Sale of Kraft Foods Stock?
Altria, one of the defendant tobacco companies, has been waiting for years–perhaps a decade–to sell its share of Kraft Foods. Altria currently owns 88% of Kraft, and this close connection between the tobacco company and the food group has suppressed the price of Kraft’s shares. Investors have been concerned that if Altria were someday to be found liable for billions of dollars in a tobacco case, then Kraft, too would end up being responsible for some of the judgments. Recently, the CEO of Altria announced that his company would set out the schedule for a planned spin-off of Kraft in January 2007. The oddity of this little corporate “save the date” announcement was soon dwarfed by the realization that, if Altria was truly serious about finally spinning off Kraft, there was a good chance that the class action attorney who brought the Schwab case might try to stop the spin-off.
