Juul, maker of vapers, has entered into judicial agreements to resolve more than 5,000 lawsuits related to its products.
The details of the deal remained secret, but Juul said it had secured an equity investment to fund it.
Hit by multiple lawsuits, Juul announced hundreds of layoffs last month, and a bankruptcy filing seemed imminent as it sought funding to continue its operations.
In June, the US Food and Drug Administration (FDA) rejected Juul’s proposal to market its product as an alternative to adult smoking, leaving its future shrouded in uncertainty. The FDA said Juul failed to properly answer key questions about chemicals leaking from its devices. The agency stayed its initial decision during Juul’s appeal.
In September, the San Francisco-based company agreed to pay nearly $440 million to resolve investigations launched two years ago by 33 states into advertising of its high-nicotine products.
That same month, Big Tobacco Altria, the company’s largest investor, announced plans to compete in the e-cigarette market on its own.
Altria pulled its own vapers from the market in 2018 after investing nearly $13 billion in Juul. But that investment has lost more than 95% of its value as Juul’s prospects dim, giving Altria the option of opting out of the non-compete agreement.
That means Juul may soon have to fight for shelf space with Altria, the maker of Marlboro, as well as traditional competitors like Reynolds American’s Vuse, which recently overtook Juul to become the vape market leader in the USA.
Juul has settled lawsuits with 37 states and territories and said it is in talks with other major shareholders to resolve pending lawsuits.