For years, the tobacco industry had been embattled with health-related lawsuits.

Majority of
these legal actions were for cigarette companies in comparison to the smokeless tobacco
industry. Still, UST had seven pending health-related legal actions. UST has historically been the
most profit gaining companies in communal America. Even though S&P rated the dues of many
tobacco companies as an investment group, its long term view of the tobacco industry was
unclear given the rising restrictions on tobacco products and health awareness among consumers.
Despite the uncertain forecast of the tobacco industry, in December 1998, UST’s board of
directors decided for effective capital structure change. It approved the decision to borrow up to
$1 billion to accelerate the company’s stock repurchase program.