A judge Friday reinstated a $12 billion appeal bond on Philip Morris USA, prompting a company lawyer to again warn that the price of challenging a court loss could bankrupt the cigarette maker.

The ruling was the latest turn in a battle over how much Philip Morris should pay of a $10.1 billion March judgment before appealing it. “The bottom line is, a party shouldn’t be forced into bankruptcy and deprived of the right to appeal,” company attorney John Mulderig said after the hearing.

In March, Madison County Judge Nicholas Byron ruled against the company in a consumer class-action lawsuit accusing it of misleading Illinois smokers into believing light cigarettes are less harmful than regular brands.

Byron later reduced the amount by nearly half after Philip Morris argued that paying the bonds would drive it out of business and force it to default on a $206 billion, 25-year nationwide tobacco settlement.

The plaintiffs’ lawyer, Stephen Tillery, appealed that reduction, arguing Byron didn’t have the discretion to reduce an appeal bond required by Illinois Supreme Court rules. An appeals court agreed July 14, ordering Byron to reconsider the reduction.

The company immediately petitioned the state Supreme Court to clarify the appeals-bond law. Philip Morris wants the justices to rule that judges have some latitude in setting the bonds. The law now requires losers of lawsuits to post the amount of the judgment as well as enough to cover court costs and interest.

“The key part of this is the Supreme Court will have an opportunity to consider this very important legal question,” said Mulderig, associate general counsel for Altria Corporate Services, another unit of Philip Morris’ corporate parent, Altria Group.

But Tillery said it’s possible the Supreme Court will elect to do nothing, in which case Byron’s ruling would stand and the company would have to pay up before appealing the verdict.

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