Thursday, July 15, 2010

August 4th court hearing documents

I received a delivery from Epiq today with the notice of the rescheduling for the hearing from July 16th to August 4th. The document indicated that they had received over 300 objections to the termination of benefits including one from the NPRC lawyer representing 400 retirees, and also one from the US trustee challenging Nortel's decision.

It looks like the hearing on Aug 4th will have good representation for retiree and LTD interests and I sincerely hope that the judge rules in favor of forming a 1114 committee. If that is the case there is the likelihood that the Nortel benefits may not be terminated on September 1, since I can't see how a 1114 committee can be established and negotiate anything in that time frame.

If the judge rules against the formation of a 1114 committee, and in favor of Nortel terminating the benefits, then there are certainly opportunities to appeal the decision, as illustrated in previous court cases of a similar nature. An appeal by Delphi employees for example, resulted in a decision to award the employees $8m for the establishment of a benefits group to cover them after the benefits were terminated.

If Nortel is smart they would agree to the formation of a 1114 committee now, and extend the benefits until negotiations in the committee are completed. I'm not sure how long that took in other cases, but at the rate things are decided in bankruptcy court it probably would be months before a decision is reached.

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