NUSRPC files a motion in court to form a Voluntary Employee Beneficiary Association

Following the withdrawal of the Nortel motion to terminate medical and LTD benefits, the NUSRPC (Nortel US Retirees protection Committee) filed a motion in Bankruptcy Court to establish a Voluntary Employee Beneficiary Association under section 501 (c)(9) of the Internal Revenue Code.

It appears that the Third Circuit Court of Appeals rendered a decision on July 13,2010 against an appeal by Visteon. The decision means that the Bankruptcy Code Section 1114 protects even benefits (medical and LTD for example) that a debtor reserved the right to modify out side bankruptcy. Hence Nortel's argument in their original motion is now null and void.

The motion by the NUSRPC calls for the formation of a VEBA which would take advantage of the Health Coverage tax credit (HTCT) which is a 80% federal subsidy. This subsidy applies to retirees and spouses 55 and older who are receiving pensions from the PBGC and pays 80% of the cost of health insurance and prescription drug programs. The HTCT is limited to those under 65, and to spouses and dependents of a retiree who is under 67. It also only applies to those receiving pensions from the PBGC.

Hopefully the NUSRPC will issue a comment shortly on all these developments.

So with all this happening it may mean that the Nortel benefits will have to continue after August, but I don't know yet.