Wednesday, October 7, 2009

US filed claims and NUSRPC status

The following is an email sent to me by the NUSRPC and outlines the current status of claims and some future possibilities.

NUSRPC Members Update October 7, 2009

The NUSRPC is a volunteer organization. Nothing in this e-mail is intended to be, nor should be construed to be, legal or financial advice.

Status Update

We are pleased to report that the NUSRPC, working with Segal Co., was able to complete and transmit claims calculations for the NUSRPC members who had non-qualified pensions so that all of those claims could be submitted before the September 30 bar date.

Obtaining the required information from Nortel/Mercer proved to be a far more difficult and time consuming process than we had expected. However the effort was successful and the lessons we learned and the procedures developed will certainly benefit former Nortel employees in Canada as they go through a similar process with Segal Co. and Nortel/Mercer in Canada.

Claims were calculated for 195 of our 421 members. Those who did not have a non-qualified pension will not be assessed charges for Segal Co.’s work. In terms of next steps (from Akin Gump) “Normally, a company has until 120 days after a plan of reorganization becomes effective to object to claims. This means that it could be many many months before claimants hear anything. Once the claims objection deadline contained in the plan of reorganization passes, the claims are deemed allowed, if not objected to.”

What’s Next?

Since Nortel’s plan is to completely sell off its assets and cease operations we may be sure that at some point our benefits (Medical, Life Insurance, LTD and Long Term Care) will also cease. We know that the majority of our members regard continuing medical benefits as their most important issue.

What we do not know is:

1. When will Nortel petition the court for permission to cease benefits?

2. Whether or not COBRA will be available as a temporary alternative for former employees. Nortel is obliged to offer COBRA as an alternative to former employees as long as they offer medical benefits to current Nortel employees. But should Nortel withdraw medical benefits from their remaining employees they would face no obligation to offer COBRA to former employees.

3. What will be the court’s response to the petition? The court may choose to grant Nortel’s petition outright. Or they may choose to grant the petition subject to certain conditions or negotiations. These conditions or negotiations could provide former employees and the NUSRPC with an opportunity to mitigate the loss of our benefits.

The NUSRPC cannot influence the timing of Nortel’s petition or the availability of COBRA. Nor can we affect the Court’s decision – other than by making our views known to the Court. What the NUSRPC can do and has been doing is to work to identify the options available to us should the court choose to grant Nortel’s petition subject to certain conditions or negotiations. We have identified some options which may be open to us which could provide the possibility of alternative medical coverage. We are investigating these so that we may be as prepared as possible when and if the time comes.

Should the court’s decision make such options possible the NUSRPC may require some expert assistance from both legal and benefits professionals. For this reason we have not yet made final plans for a refund of remaining membership fees. Should the court’s decision not make such options possible we will consider a wind up of the NUSRPC and a refund all remaining monies to our members (reflecting pro-rated fees for those who received Segal calculations).

The NUSRPC will continue to provide you with updates as developments occur regarding our benefits or affecting the claims we have already filed.

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