Here's the playbook:
1) A.G.s and private lawyers start filing lawsuits.
2) Defendants realized there is potentially catastrophic liability here and start negotiating a master settlement agreement ("MSA") whereby the states agree not to sue in the future in exchange for a set payment schedule to the plaintiffs.[1]
3) States A.G.s realize this is a great publicity opportunity to leverage their career into other elected office and governors realize this a real revenue stream.
4) So, interests aligned and there is a settlement.
5) Lawyers make a TON of money on their fee schedule set forth in the MSA. So much so, the Tobacco MSA lawyers were securitizing their future fees in private markets.
6) Bankers swoop in and start pitching states on the securitization of MSA payments for states to cover current deficit shortfalls.
7) Bankers make a point or two on the securitization deal proceeds ($10s or $100s of millions).
8) States leverage their future payments under the MSA to fill budget gaps where ever possible. Some allocate a small portion of the proceeds to the victims of the malfeasance but many do not because there are better ways to get future votes.
</rant>
Full disclosure: I was once a young public finance analyst working 80-100 hour weeks building financial models to securitize Tobacco MSA payments...slight grudge still held.
[0] https://en.wikipedia.org/wiki/Tobacco_Master_Settlement_Agre...
[1] Tobacco stocks jumped on news of the settlement because a large known liability is much better than an unknown one.
EDIT: slight clarification.