Friday, May 28, 2010

NRPC comments on Canadian Bill C-501

The following is a statement from a representative of the NRPC with respect to the C-501 bill in the Canadian Industry Committee of parliament.

Please write to members on that committee and to elected representatives with your request that they support the passage of the bill. If the bill does not pass, or passes in its current form Nortel Pensioners will receive no benefit. The bill needs to be retroactively applied to Bankruptcy filings during 2009 or earlier. The bill also needs to apply to both BIA and CCAA. Otherwise the Nortel bill will not help us at all, though it may help others in similar situations in the future.

This is the NRPC statement:

Bill C-501 passed 2nd. Reading on May 26, 2010 in the House of Commons and has been sent to Committee! Even a few Conservative MPs supported the Bill. Thanks to everyone who wrote to the MPs.

In 2009 when Wayne Marston of the NDP introduced his Private Members Bill to give priority to pensioners and terminated workers, he called it a "Nortel Bill". It was the first significant attempt to change Canada's outdated and unfair bankruptcy laws to protect pensioners and employees. The plight of our members was the impetus for the Bill. After prorogation, Mr. Marston transferred his Bill to Mr. Rafferty who had a better position in the queue for introducing Private Members Bills, and it became C-501.

Even when the Bill was first introduced, in order to help us it would require either the transfer of the Nortel Bankruptcy case from the CCAA (bankruptcy protection) to the BIA (liquidation), or retroactive implementation of the new law to at least January 13, 2009. When Judge Morawetz refused to approve the first Settlement Agreement in March 2010, it became clear that he would be unlikely to move the Nortel case under the BIA over the objections of the bondholders. With current laws, it is possible for Nortel to be liquidated under the CCAA.

So retroactive implementation of C-501 applied to the CCAA is one of the conditions needed if we are to benefit from it. We will press for an amendment to give C-501 this effect while the Bill is in the Committee stage. If this fails but C-501 does become law, it will still help those pensioners who follow us down the unhappy path of corporate bankruptcy. You can also be sure that NRPC will continue actively to seek ways at the federal level to obtain relief for Nortel's pensioners and terminated employees, through new Bills or through other means such as tax relief. Initiatives at the Ontario level are also in progress and we will report on those soon.

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