The following is a copy of the letter I sent off to the US court objecting to the motion by Nortel to terminate retiree medical benefits and disabled employees benefits.
I urge everyone affected to write to the court and object. You have until July 6th to raise an objection. If you do write you need to also send a copy the 2 law firms working for Nortel.
Clerk of the United States Bankruptcy Court
District of Delaware
824 Market Street, 3rd Floor
Wilmington, Delaware 19801
CC: Cleary, Gottlieb, Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
Morris, Nichols, Arsht & Tunnell LLP
1201 North Market Street
P.O.Box 1347
Wilmington, Delaware 19801
Subject: Nortel Networks Inc, et al Case No. 09-10138 (KG)
Dear Sir,
I am writing to formally object to the motion by Nortel Networks made before the Bankruptcy Court, District of Delaware, Honorable Kevin Gross presiding, to terminate retiree healthcare, long term care, life insurance, and disabled employee benefits.
Termination of the Nortel Retiree and Disabled Employee Medical plans before a final liquidation of the Nortel estate, and without considering the corresponding claims is placing an undue burden on thousands of retirees, their spouses, and their dependents and may force many people to lose medical insurance. It will also result in thousands of ex-Nortel employees having to pay very large increases in medical premiums and deductibles, at a time when many are losing pension income as a result of Nortel filing chapter 11 bankruptcy.
The following items are my arguments as to why I object to the motion before the court, (docket #3204 on court records), and why I am requesting the court to deny the motion, and require Nortel to continue these plans until all claims have been submitted, and a plan accepted by all creditors including retirees and disabled employees regarding the disbursement of Nortel's remaining estate
(1) Pensioners who retired in earlier decades were not properly informed by Nortel that the retiree medical plan could be terminated at the will of the company. Some retirees have copies of plan information booklets dating from 1991 that do not contain any clause defining Nortel's right to terminate the plan if they desire to do so.
(2) Nortel has struck a deal with Canadian retirees to continue their health care coverage in Canada until the end of 2010. Based on this disparity in treatment, I consider the denial of healthcare to US retirees discriminatory.
(3) Nortel has not yet filed a plan of reorganization. In the event that Nortel decides to maintain a viable patent operation the current Nortel retirees will be denied the opportunity to enter a motion that medical coverage be continued in the new structure.
(4) It is my understanding that Nortel plans to continue its medical plan for remaining employees. The move to eliminate costs associated with the retirees and disabled personnel is therefore, in my opinion, discriminatory.
(5) Other bankruptcies have resulted in the formation of a 1114 committee to ensure that the rights of the retirees and others who are receiving non-pension employee benefits are properly protected. At this point there is no specific representation on the unsecured creditor's committee to defend against maltreatment of retirees' non-pension rights. Nortel has stated that a 1114 committee does not apply in this case. Such a decision should only be rendered by the court after due consideration. The motion to terminate the plans should only be considered after a decision has been made regarding a 1114 committee.
(6) Nortel retirees will lose a number of benefits as a result of Nortel terminating the retiree medical plan. Since the bar date has passed on claims, Nortel retirees may be impacted negatively if they are not given a new bar date to file claims against Nortel with respect to their rights under the Retiree Medical plan, the Retiree Long Term Care plan, and the Retiree Life Insurance plan. A similar situation exists with respect to disabled employees.
(7) Chapter 11 bankruptcy law, at the discretion of the court, requires Nortel to file a plan of disclosure within 18 months of the initial filing. This motion denies retirees, as creditors, the right to properly determine and file claims for their future losses, so that their claims may be property treated in any such disclosure.
(8) Nortel claims that the cost of maintaining the medical plans is burdensome. At a rate of $1M per month for retiree medical coverage, and a similar figure for disabled employees, the amount expended on these plans is probably less than 20% of the costs of legal support which Nortel is paying to work through the reorganization process. Nortel has argued that these welfare costs are for people who are providing no service to Nortel. The essence of these plans is based on the services that the retirees and disabled employees provided in prior years, and for which services they were promised pension, and medical benefits in perpetuity.
Wednesday, June 30, 2010
Sunday, June 27, 2010
Nortel preparing to file disclosure in September?
The following article by Peg Brickley contains a number of items that bring into focus why Nortel is acting to close down the medical benefits, and also provides information on legal payments, and a possible pay out to creditors.
Points in the article I thought were especially pertinent to us are:
1. The law requires companies in Chapter 11 to file their plan within 18 months after filing. This means Nortel must provide a plan to the court by September 2010. Nortel plans to file the plan by July 14th.
2. Nortel has asked for a Sept 3 deadline to file a disclosure statement outlining what will be paid to creditors.
3. Nortel is preparing a plan to distribute $2.8B to creditors. Nortel has an estimated $5.5B in liabilities subject to compromise
4.Nortel has been billed by it's legal representative Cleary Gottlieb Steen and Hamilton $76m in legal fees from Jan 09 to April 10. Many other law firms are also looking for payment.
By Peg Brickley Of DOW JONES DAILY BANKRUPTCY REVIEW
Nortel Networks Corp. (NRTLQ) has moved to shut off health care to retirees and payments to disabled employees in the U.S. as it prepares to distribute $2.8 billion in cash and deal with patents that could be worth another $1 billion.
Papers filed recently in a U.S. Bankruptcy Court say the former telecommunications equipment giant wants to end health care and life insurance benefits on Aug. 31 for more than 4,000 retired people or their dependents, and cut off long-term disability payments to another 280 people.
Each program costs $1 million per month, according to Nortel, and it's money the company no longer wants to spend. Lawyers and a spokesman for the company were not immediately able Tuesday to answer questions about the retiree health care and life insurance cut off, or the decision to end disability payments.
At the end of March, Nortel reached a settlement with Canadian recipients of long-term disability payments who battled the company's plan to shut them off, and leave them with no right to sue.
Nortel is also caught up in a court fight over its bid to block U.K. pension regulators from pursuing it over underfunded pensions in Britain. The company won a favorable ruling in bankruptcy court.
The decision to end retiree health care and push disabled people off the payroll comes as Nortel prepares to file a Chapter 11 scheme to distribute $2.8 billion raised by the sale of most of its businesses among its creditors.
As of the end of March, Nortel also had $1.9 billion in unrestricted cash and $788 million cash stored up in subsidiaries.
Financial records filed with the U.S. Bankruptcy Court in Wilmington, Del., show pensions and other "post-retirement obligations" account for more than $700 million of Nortel's estimated $5.5 billion stack of "liabilities subject to compromise." Most of that category, $3.9 billion, is bond debt.
Nortel's Chapter 11 plan is due July 14, and the Canadian telecommunications equipment maker intends to have a plan on file "on or before" that deadline, according to a filing last week. Nortel is up against the 18-month limit Congress set on companies operating under Chapter 11 protection, to keep them from languishing in bankruptcy.
However, Nortel says it needs additional time to file its disclosure statement, a report that is usually filed side-by-side with the Chapter 11 plan. It asked for a Sept. 3 deadline for the disclosure statement, a document that is supposed to spell out in plain English who is getting paid and how much.
In Nortel's case, the disclosure statement will also be the place to look to see whether the company hopes to rebuild its corporate life around its patent portfolio, or sell the intellectual property and hand out cash to creditors.
Nortel has tested the waters to see how much interest it will get if it decides to sell the patents. There is an appetite for the patents, sources said. There is also speculation that private equity investors are eyeing the Nortel patent portfolio, along with companies like Research In Motion Ltd. (RIM.T), sources said.
The other option, for Nortel and for its creditors, is to form a company to license out the patents, a move that could mean a continuing stream of revenue for creditors. It could also mean continuing exposure to risk, such as the risk that new technology or bad luck in the courts could dim the value of Nortel's patents.
Estimates are that the portfolio as a whole could bring over $1 billion, with the next-generation wireless patents alone expected to fetch $300 million to $500 million.
While the debate over the best way to turn Nortel's patents into cash continues, the professional-fee bills continued to mount.
Some of Nortel's key advisors are due to go before a Delaware bankruptcy judge Friday to collect more than $29 million for three months of work on the case, from February through April. Cleary Gottlieb Steen & Hamilton, the lead lawyers for Nortel, are in line for $14.8 million of that. From January of 2009 through the end of April, the Cleary firm has billed nearly $76 million to Nortel, court records show.
Nortel sought protection from creditors in courts in the U.S., Canada and elsewhere in January 2009.
-By Peg Brickley, Dow Jones Daily Bankruptcy Review; 302-521-2266
Points in the article I thought were especially pertinent to us are:
1. The law requires companies in Chapter 11 to file their plan within 18 months after filing. This means Nortel must provide a plan to the court by September 2010. Nortel plans to file the plan by July 14th.
2. Nortel has asked for a Sept 3 deadline to file a disclosure statement outlining what will be paid to creditors.
3. Nortel is preparing a plan to distribute $2.8B to creditors. Nortel has an estimated $5.5B in liabilities subject to compromise
4.Nortel has been billed by it's legal representative Cleary Gottlieb Steen and Hamilton $76m in legal fees from Jan 09 to April 10. Many other law firms are also looking for payment.
By Peg Brickley Of DOW JONES DAILY BANKRUPTCY REVIEW
Nortel Networks Corp. (NRTLQ) has moved to shut off health care to retirees and payments to disabled employees in the U.S. as it prepares to distribute $2.8 billion in cash and deal with patents that could be worth another $1 billion.
Papers filed recently in a U.S. Bankruptcy Court say the former telecommunications equipment giant wants to end health care and life insurance benefits on Aug. 31 for more than 4,000 retired people or their dependents, and cut off long-term disability payments to another 280 people.
Each program costs $1 million per month, according to Nortel, and it's money the company no longer wants to spend. Lawyers and a spokesman for the company were not immediately able Tuesday to answer questions about the retiree health care and life insurance cut off, or the decision to end disability payments.
At the end of March, Nortel reached a settlement with Canadian recipients of long-term disability payments who battled the company's plan to shut them off, and leave them with no right to sue.
Nortel is also caught up in a court fight over its bid to block U.K. pension regulators from pursuing it over underfunded pensions in Britain. The company won a favorable ruling in bankruptcy court.
The decision to end retiree health care and push disabled people off the payroll comes as Nortel prepares to file a Chapter 11 scheme to distribute $2.8 billion raised by the sale of most of its businesses among its creditors.
As of the end of March, Nortel also had $1.9 billion in unrestricted cash and $788 million cash stored up in subsidiaries.
Financial records filed with the U.S. Bankruptcy Court in Wilmington, Del., show pensions and other "post-retirement obligations" account for more than $700 million of Nortel's estimated $5.5 billion stack of "liabilities subject to compromise." Most of that category, $3.9 billion, is bond debt.
Nortel's Chapter 11 plan is due July 14, and the Canadian telecommunications equipment maker intends to have a plan on file "on or before" that deadline, according to a filing last week. Nortel is up against the 18-month limit Congress set on companies operating under Chapter 11 protection, to keep them from languishing in bankruptcy.
However, Nortel says it needs additional time to file its disclosure statement, a report that is usually filed side-by-side with the Chapter 11 plan. It asked for a Sept. 3 deadline for the disclosure statement, a document that is supposed to spell out in plain English who is getting paid and how much.
In Nortel's case, the disclosure statement will also be the place to look to see whether the company hopes to rebuild its corporate life around its patent portfolio, or sell the intellectual property and hand out cash to creditors.
Nortel has tested the waters to see how much interest it will get if it decides to sell the patents. There is an appetite for the patents, sources said. There is also speculation that private equity investors are eyeing the Nortel patent portfolio, along with companies like Research In Motion Ltd. (RIM.T), sources said.
The other option, for Nortel and for its creditors, is to form a company to license out the patents, a move that could mean a continuing stream of revenue for creditors. It could also mean continuing exposure to risk, such as the risk that new technology or bad luck in the courts could dim the value of Nortel's patents.
Estimates are that the portfolio as a whole could bring over $1 billion, with the next-generation wireless patents alone expected to fetch $300 million to $500 million.
While the debate over the best way to turn Nortel's patents into cash continues, the professional-fee bills continued to mount.
Some of Nortel's key advisors are due to go before a Delaware bankruptcy judge Friday to collect more than $29 million for three months of work on the case, from February through April. Cleary Gottlieb Steen & Hamilton, the lead lawyers for Nortel, are in line for $14.8 million of that. From January of 2009 through the end of April, the Cleary firm has billed nearly $76 million to Nortel, court records show.
Nortel sought protection from creditors in courts in the U.S., Canada and elsewhere in January 2009.
-By Peg Brickley, Dow Jones Daily Bankruptcy Review; 302-521-2266
Saturday, June 26, 2010
US Retiree Medical Benefits Hearing
I received a letter today from Epiq Systems stating that Nortel has put forward a motion to cut off our US retiree medical benefits as of August 31 2010. The letter contains the same information as was in the docket #320 that I mentioned in an earlier post.
The letter indicated that I have the right to object, and need to do so in writing to the court and also to Nortel's attorneys before July 6th 2010. If no objections are received then the court may not even bother with a hearing and will simply proceed with the motion and issue an order stopping our benefits.
I plan to write an objection. I may have to go to the court in Delaware in person to object. Hopefully a lot more people will object as well.
These medical benefits mean a lot to us. Without those benefits my wife will have no insurance coverage at all. We will have to pay a lot more for insurance that we thought we would always have when I retired. My long term care insurance will also disappear, as will the life insurance that was part of the package.
Nortel claims it is costing them $1M per month for the retiree medical coverage. From my review of the dockets on Epiq many law firms are charging fees that far exceed that $1M yet the court and Nortel has allowed those charges to be paid.
We retirees are creditors also. Our voice should count for something, and I truly hope that many of you out there get angry at this treatment and object and file a notice. We didn't cause Nortel's downfall yet we are paying a huge price for it. I don't think we should take this treatment lying down.
The letter indicated that I have the right to object, and need to do so in writing to the court and also to Nortel's attorneys before July 6th 2010. If no objections are received then the court may not even bother with a hearing and will simply proceed with the motion and issue an order stopping our benefits.
I plan to write an objection. I may have to go to the court in Delaware in person to object. Hopefully a lot more people will object as well.
These medical benefits mean a lot to us. Without those benefits my wife will have no insurance coverage at all. We will have to pay a lot more for insurance that we thought we would always have when I retired. My long term care insurance will also disappear, as will the life insurance that was part of the package.
Nortel claims it is costing them $1M per month for the retiree medical coverage. From my review of the dockets on Epiq many law firms are charging fees that far exceed that $1M yet the court and Nortel has allowed those charges to be paid.
We retirees are creditors also. Our voice should count for something, and I truly hope that many of you out there get angry at this treatment and object and file a notice. We didn't cause Nortel's downfall yet we are paying a huge price for it. I don't think we should take this treatment lying down.
Wednesday, June 23, 2010
Canadian Finance report downplays Nortel retirees' appeal for fair treatment.
The report on retirement income security of Canadians by the Standing Committee on Finance has been released. Only the NDP members on the committee have honored their promises to include a recommendation to protect pensioners from losses in their defined pension trust as a result of bankruptcy. Liberals and Bloc Quebecois also added some ideas aimed at helping but overall the recommendations fall far short of what is needed.
In spite of compelling testimony by Don Sproule of the NRPC and Diane Urquhart, the conservatives on the committee have turned their backs on Nortel retirees and disabled people who stand to lose pension payments and support as a result of the Nortel bankruptcy.
Stating, in a phone call, that the Nortel retiree representation had no credibility, the conservative chairman of the committee praised the Canadian pension plan and touted it’s soundness. This is in spite of the fact that Canada offers no protection to retirees in the event their plan is devastated by bankruptcy of the company funding it, and worse still, Canada ignores the plight of the disabled workers who will be abandoned at the end of the year.
Quoting bondholders and bankers, the committee report refers to defined pension plans as a “Gratuity”. This illustrates the cold and indifferent attitude of the conservatives at large, and their total disregard of real life facts. It has been well understood over many years now that defined pensions are contracts between employees and employers.
Each year I worked at Nortel I received clear statements in writing defining the amount of pension, based on my salary and service, which I would obtain when I reached retirement age. There was no doubt that this was part of my remuneration and like most people it became a central part of my planning for life in retirement.
To classify this as a “gratuity” is insulting and offensive, when I saw it as deferred compensation for the eighty thousand hours, or more, that I spent trying to make Nortel a successful company. Nortel employees provided earnings back to all Canadians over more than 100years through increased employment, corporate and personal taxes, and world wide trade generated by the brilliance of Nortel’s products. Compensation for those efforts always included the understanding of a reasonable pension and all Nortel employees, including management, saw that as part of the overall remuneration package.
With this example of the conservative leadership I see Canada falling behind countries that shine in terms of their treatment of their citizens. Under the current PM and his party, Canada will remain among the ranks of those who ignore the plight of their retirees and who prefer to supplement the wealth of the rich bankers and bondholders rather than helping the weak and elderly live a reasonable life in retirement.
The report may be found at:
http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4628228&Language=e&Mode=1&Parl=40&Ses=3.
In spite of compelling testimony by Don Sproule of the NRPC and Diane Urquhart, the conservatives on the committee have turned their backs on Nortel retirees and disabled people who stand to lose pension payments and support as a result of the Nortel bankruptcy.
Stating, in a phone call, that the Nortel retiree representation had no credibility, the conservative chairman of the committee praised the Canadian pension plan and touted it’s soundness. This is in spite of the fact that Canada offers no protection to retirees in the event their plan is devastated by bankruptcy of the company funding it, and worse still, Canada ignores the plight of the disabled workers who will be abandoned at the end of the year.
Quoting bondholders and bankers, the committee report refers to defined pension plans as a “Gratuity”. This illustrates the cold and indifferent attitude of the conservatives at large, and their total disregard of real life facts. It has been well understood over many years now that defined pensions are contracts between employees and employers.
Each year I worked at Nortel I received clear statements in writing defining the amount of pension, based on my salary and service, which I would obtain when I reached retirement age. There was no doubt that this was part of my remuneration and like most people it became a central part of my planning for life in retirement.
To classify this as a “gratuity” is insulting and offensive, when I saw it as deferred compensation for the eighty thousand hours, or more, that I spent trying to make Nortel a successful company. Nortel employees provided earnings back to all Canadians over more than 100years through increased employment, corporate and personal taxes, and world wide trade generated by the brilliance of Nortel’s products. Compensation for those efforts always included the understanding of a reasonable pension and all Nortel employees, including management, saw that as part of the overall remuneration package.
With this example of the conservative leadership I see Canada falling behind countries that shine in terms of their treatment of their citizens. Under the current PM and his party, Canada will remain among the ranks of those who ignore the plight of their retirees and who prefer to supplement the wealth of the rich bankers and bondholders rather than helping the weak and elderly live a reasonable life in retirement.
The report may be found at:
http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4628228&Language=e&Mode=1&Parl=40&Ses=3.
Tuesday, June 22, 2010
Nortel's motion on medical plan eliminates 1114 committee
Docket 3204- Nortel's motion to terminate the US medical and disability plans
Nortel’s motion states that section 1114 of the bankruptcy code does not apply to their case since the medical and disability benefits are not vested. Furthermore Nortel explains at great length that the plans are welfare, unvested, and specifically state that they can be terminated at any time. Their motion contains previous legal rulings that support their position, quoting Delphi, Ceridian, General Motors, Container Group of America, and Doscokil company cases.
Nortel’s motion states “Section 1114 is inapplicable to the termination of the Retiree Welfare plans because the plan documents unambiguously provide NNI the right to unilaterally modify or terminate the plan at any time.”
As a result it is likely that the judge will rule in favor of Nortel and will not require the establishment of a 1114 committee with retiree representation to negotiate the termination of the medical benefits.
Since there is no organization to represent the rights of retirees on the creditor’s committee, we are essentially at the mercy of the court, and have no vote in whether or not a 1114 committee should be established.
Nortel also indicates that by terminating the medical and disability plans they will save $8 million this year. They argue that retirees and disabled people provide no service or value to the company and based on this, they are comfortable with making the decision to stop these benefits.
Who are these people? They must be outsourced consultants. This would never have happened in my time working at Nortel.
Objections to this motion must be filed with the court by July 6th 2010, and also with the Debtors (NNI). The hearing will be July 16th 2010 at the court in Delaware.
Nortel’s motion states that section 1114 of the bankruptcy code does not apply to their case since the medical and disability benefits are not vested. Furthermore Nortel explains at great length that the plans are welfare, unvested, and specifically state that they can be terminated at any time. Their motion contains previous legal rulings that support their position, quoting Delphi, Ceridian, General Motors, Container Group of America, and Doscokil company cases.
Nortel’s motion states “Section 1114 is inapplicable to the termination of the Retiree Welfare plans because the plan documents unambiguously provide NNI the right to unilaterally modify or terminate the plan at any time.”
As a result it is likely that the judge will rule in favor of Nortel and will not require the establishment of a 1114 committee with retiree representation to negotiate the termination of the medical benefits.
Since there is no organization to represent the rights of retirees on the creditor’s committee, we are essentially at the mercy of the court, and have no vote in whether or not a 1114 committee should be established.
Nortel also indicates that by terminating the medical and disability plans they will save $8 million this year. They argue that retirees and disabled people provide no service or value to the company and based on this, they are comfortable with making the decision to stop these benefits.
Who are these people? They must be outsourced consultants. This would never have happened in my time working at Nortel.
Objections to this motion must be filed with the court by July 6th 2010, and also with the Debtors (NNI). The hearing will be July 16th 2010 at the court in Delaware.
Nortel US files motion to cease retiree medical benefits
As reported in the News & Observer blog, Raleigh, by john Murawski on 06/22/2010
Nortel Networks, which is winding down its bankruptcy proceedings, has asked a federal court to terminate insurance coverage for more than 4,000 retirees and their dependents.
The company told the court in Delaware that's overseeing the bankruptcy proceedings that the retiree benefits are costing $2 million a month. The company wants to discontinue subsidizing coverage for the retirees on Aug. 31.
"While the Debtors recognize the importance of the benefits provided under the Retiree Medical Plan to their retired employees, the Debtors have determined that it is necessary to terminate the plan at this state of the restructuring," the company told the court.
Nortel wants to cut off supplemental medical coverage, prescription drug coverage, longer term disability and life insurance.
"If you wish to replace such coverage or to supplement Medicare coverage ... you will need to purchase and pay for an individual insurance plan of your choice," the company said in a letter to retirees. "There will be no Nortel subsidy."
Nortel, which used to employ as many as 10,000 in Research Triangle Park, filed for Chapter 11 bankruptcy protection in January 2009.
The company, once North America's leading maker of switches and other telecom gear, has sold of most of its business assets as it winds down the proceedings. To date Nortel has sold off its assets to Radware, Telefonaktiebolaget LM Ericsson, Hitachi, Avaya, Ciena Corp. and Genband.
However, the company has arranged for its 4,019 retirees and dependents to buy coverage from UnitedHealthcare that is specially tailored to Nortel retirees and not available on the open market.
The UnitedHealthcare portfolio of policies do not require a medical exam and will not take into account current illness, tobacco use or medical history in setting rates.
Nortel said in its June 14 letter to retirees that they "will have the right o purchase one of these products at a rate which does not factor in medical history or tobacco use, with timely enrollment."
Insuring Nortel's 2,592 retirees and 1,490 spouses and children are costing the company $1 million a month. Covering 280 participants on long term disability is costing another $1 million a month.
Nortel Networks, which is winding down its bankruptcy proceedings, has asked a federal court to terminate insurance coverage for more than 4,000 retirees and their dependents.
The company told the court in Delaware that's overseeing the bankruptcy proceedings that the retiree benefits are costing $2 million a month. The company wants to discontinue subsidizing coverage for the retirees on Aug. 31.
"While the Debtors recognize the importance of the benefits provided under the Retiree Medical Plan to their retired employees, the Debtors have determined that it is necessary to terminate the plan at this state of the restructuring," the company told the court.
Nortel wants to cut off supplemental medical coverage, prescription drug coverage, longer term disability and life insurance.
"If you wish to replace such coverage or to supplement Medicare coverage ... you will need to purchase and pay for an individual insurance plan of your choice," the company said in a letter to retirees. "There will be no Nortel subsidy."
Nortel, which used to employ as many as 10,000 in Research Triangle Park, filed for Chapter 11 bankruptcy protection in January 2009.
The company, once North America's leading maker of switches and other telecom gear, has sold of most of its business assets as it winds down the proceedings. To date Nortel has sold off its assets to Radware, Telefonaktiebolaget LM Ericsson, Hitachi, Avaya, Ciena Corp. and Genband.
However, the company has arranged for its 4,019 retirees and dependents to buy coverage from UnitedHealthcare that is specially tailored to Nortel retirees and not available on the open market.
The UnitedHealthcare portfolio of policies do not require a medical exam and will not take into account current illness, tobacco use or medical history in setting rates.
Nortel said in its June 14 letter to retirees that they "will have the right o purchase one of these products at a rate which does not factor in medical history or tobacco use, with timely enrollment."
Insuring Nortel's 2,592 retirees and 1,490 spouses and children are costing the company $1 million a month. Covering 280 participants on long term disability is costing another $1 million a month.
Monday, June 21, 2010
I read the following "Reflections of a Retiree" on the NRPC website. It was written by an old friend and colleague Stan Lamontagne from Montreal. It shows the remarkable wisdom and grace of the people who are being hurt by the ridiculous pension and bankruptcy laws of Canada. Stan and I go back a long time, and we sure don't recognize the Nortel that has dumped us into this awful predicament. Yet Stan has had the ability to speak out with constructive ideas and support to help us all weather this terrible storm. We need many more people like Stan to put their ideas and thoughts into words and letters and protests so that the good Canadian people waken up to what a travesty we Nortel retirees and disabled people are facing.
Reflections of a Retiree
By Stan Lamontagne
To our politicians
Yesterday evening I was watching the late evening news. On the news, there was a story about a mudslide in BC and a number of residents who lost their homes and farms in the slide.
The first thing that comes to mind is how these people will cope, probably not very well in the short term. However, with time and the assistance of the various governments, various agencies, friends and family they will pull through and rebuild their lives. As an example, the BC government will provide$300,000.00 in disaster relief.
This got me thinking about the fires in BC a number of years ago, the various floods, the ice storm in Quebec, the drought in the prairies and the floods in Manitoba etc. It seems natural disasters are part of our landscape.
Therefore, what happens! Canadians from the four corners of our land pull together. We mobilize our resources and we give generously of ourselves. Some lay sandbags, while some fight fires. Others provide shelters for families, some provide food and clothing and many give financial assistance and ultimately the various levels of government provide some form of disaster relief.
There is one theme that permeates these events one chain that binds them all together governments step up to the plate and provides help and financial assistance.
Where do these funds come from? Well the funds come from our paycheques .From retirees some of whom have paid taxes for up to Seventy Years. Let's not be fooled, we provide the assistance through our taxes the government is the vehicle used to provide relief
Ironically, a bankruptcy is not a disaster but one such as Nortel probably affects more people than many natural disasters. We have not asked for a hand out. We have not asked for money. We are only asking the government to do for us what they did in the Karol Homolka case push bill 501 through parliament.
From today ‘s news, the Federal Government forced a change in legislation to prevent Karol Homolka from receiving a pardon it just goes to show the government can rush a bill through parliament quickly to gain political points.
If we are not asking for money, what are we asking for? The answer is simple as we are not complicated. We want to live out our remaining years in dignity and with pride. We want to walk down the street with our head held up high. We want to pay our own way not depend on family and friends for food and shelter.
Moreover, most of all, we want our governments to recognize us as people who deserve at the very least equal status to an entity called brick and mortar sounds ridiculous?
I pray that sanity becomes the norm in Canada and the people take precedence over corporations.
Now it is up to you to get out, to see your MNA and MP, to speak to them to let them know what the reduction in your wages and loss of health benefits means to you and your family. Tell them if they want your vote, the vote of your friends and family they need to support our cause in parliament.
Do not take NO for an answer from your member of parliament a YES to our cause is the only answer
Reflections of a Retiree
By Stan Lamontagne
To our politicians
Yesterday evening I was watching the late evening news. On the news, there was a story about a mudslide in BC and a number of residents who lost their homes and farms in the slide.
The first thing that comes to mind is how these people will cope, probably not very well in the short term. However, with time and the assistance of the various governments, various agencies, friends and family they will pull through and rebuild their lives. As an example, the BC government will provide$300,000.00 in disaster relief.
This got me thinking about the fires in BC a number of years ago, the various floods, the ice storm in Quebec, the drought in the prairies and the floods in Manitoba etc. It seems natural disasters are part of our landscape.
Therefore, what happens! Canadians from the four corners of our land pull together. We mobilize our resources and we give generously of ourselves. Some lay sandbags, while some fight fires. Others provide shelters for families, some provide food and clothing and many give financial assistance and ultimately the various levels of government provide some form of disaster relief.
There is one theme that permeates these events one chain that binds them all together governments step up to the plate and provides help and financial assistance.
Where do these funds come from? Well the funds come from our paycheques .From retirees some of whom have paid taxes for up to Seventy Years. Let's not be fooled, we provide the assistance through our taxes the government is the vehicle used to provide relief
Ironically, a bankruptcy is not a disaster but one such as Nortel probably affects more people than many natural disasters. We have not asked for a hand out. We have not asked for money. We are only asking the government to do for us what they did in the Karol Homolka case push bill 501 through parliament.
From today ‘s news, the Federal Government forced a change in legislation to prevent Karol Homolka from receiving a pardon it just goes to show the government can rush a bill through parliament quickly to gain political points.
If we are not asking for money, what are we asking for? The answer is simple as we are not complicated. We want to live out our remaining years in dignity and with pride. We want to walk down the street with our head held up high. We want to pay our own way not depend on family and friends for food and shelter.
Moreover, most of all, we want our governments to recognize us as people who deserve at the very least equal status to an entity called brick and mortar sounds ridiculous?
I pray that sanity becomes the norm in Canada and the people take precedence over corporations.
Now it is up to you to get out, to see your MNA and MP, to speak to them to let them know what the reduction in your wages and loss of health benefits means to you and your family. Tell them if they want your vote, the vote of your friends and family they need to support our cause in parliament.
Do not take NO for an answer from your member of parliament a YES to our cause is the only answer
Saturday, June 19, 2010
Nortel US retiree medical benefits
I received the letter from Nortel yesterday telling me that their US retiree medical benefits will cease on August 31st 2010. I guess they are within their rights to take such an action since the medical plan does state that they can change or cancel it.
So here we have it, with about 80 days notice.
They say that United Healthcare will be contacting us and carrying out webinars, phone calls and meetings. I guess United Healthcare sees this as a big opportunity to get a bunch of new clients.
The only plus is that U.H. won't require us to have medical exams and will accept people even with prior illness conditions.
The downside is that their premiums will not be subsidized by Nortel so we can expect big increases in what we have to pay.
In my case I will be considering a Medicare Advantage Program since that will give me coverage of drugs as well as doctors and hospital services. I am not sure how the costs compare yet, but I imagine it will be more than I currently pay.
For my wife, it means she loses her coverage since she is not yet eligible for Medicare. We have a few years to cover before that becomes available to her.
I'm sure we are going to have to pay big premiums to cover her medical and drugs.
We can only wait and see.
This means that we now will have to think about another set of claims on Nortel US. Since they were supposed to cover our medical, drugs, long term care, and some Life Insurance, all that goes away. Calculating those claims is going to be difficult.
Since the US-NRPC is no longer operational we are on our own for working that out. I hope to be able to get some advice from some of my ex-colleagues and will share that with my readers as I find out more. Of course I don't want to lead you astray so I will have to caution you that any advice I give should be checked with your own legal advisers and accountants.
This certainly has been a tough couple of years. I stand to lose the majority of the pension I thought was going to be there for my lifetime, and now I have to pay more to cover medical costs at a time of life when these things are becoming more important. These certainly aren't the golden years I expected. More like the rust-bucket years.
So here we have it, with about 80 days notice.
They say that United Healthcare will be contacting us and carrying out webinars, phone calls and meetings. I guess United Healthcare sees this as a big opportunity to get a bunch of new clients.
The only plus is that U.H. won't require us to have medical exams and will accept people even with prior illness conditions.
The downside is that their premiums will not be subsidized by Nortel so we can expect big increases in what we have to pay.
In my case I will be considering a Medicare Advantage Program since that will give me coverage of drugs as well as doctors and hospital services. I am not sure how the costs compare yet, but I imagine it will be more than I currently pay.
For my wife, it means she loses her coverage since she is not yet eligible for Medicare. We have a few years to cover before that becomes available to her.
I'm sure we are going to have to pay big premiums to cover her medical and drugs.
We can only wait and see.
This means that we now will have to think about another set of claims on Nortel US. Since they were supposed to cover our medical, drugs, long term care, and some Life Insurance, all that goes away. Calculating those claims is going to be difficult.
Since the US-NRPC is no longer operational we are on our own for working that out. I hope to be able to get some advice from some of my ex-colleagues and will share that with my readers as I find out more. Of course I don't want to lead you astray so I will have to caution you that any advice I give should be checked with your own legal advisers and accountants.
This certainly has been a tough couple of years. I stand to lose the majority of the pension I thought was going to be there for my lifetime, and now I have to pay more to cover medical costs at a time of life when these things are becoming more important. These certainly aren't the golden years I expected. More like the rust-bucket years.
Friday, June 18, 2010
Bill S-216 on RIGHTS FOR NORTEL DISABLED EMPLOYEES
Bill S-216 passed second reading. Here's the media release from the Disabled employees group:
RIGHTS FOR NORTEL DISABLED EMPLOYEES
Media Release (Update)
Friday, June 18, 2010, 10:00 A.M. We are relieved to hear that Bill S-216 passed Second Reading in the Senate on Thursday, June 17th. This bill legislates preferred status of the long term disability benefit claims, over other unsecured creditors in Federal bankruptcy laws.
Senator Art Eggleton's Bill S-216 - LTD Benefits in Bankruptcy. This Second Reading refers Bill S-216 to the Senate Banking, Trade and Commerce Committee for further study. Conservative Senator Percy Mockler spoke to Bill S-216 from the Conservative side of the Senate today. We understand that his Party is, in principle, supportive of Bill S-216.
The Conservatives want the Senate Banking,Trade and Commerce Committee to study the bill with care, to ensure there are no unintended consequences. We thank the Liberal Party for introducing Bill S-216 and the NDP, Bloc Québécois and Green Parties for giving their support to this important Bill. We urge the Senate Banking, Trade and Commerce Committee to begin hearing witnesses on the Bill immediately. Bill S-216 cures a toxic insurance problem that over 1.1 million Canadians are exposed to because their long-term disability benefits at work are self-insured. One in 10 Canadians with long-term disability benefits at work have the unsafe self-insured kind.
The Rights For Nortel Disabled Employees Group are asking Canadian employees to check whether their long-term disability benefits are insured and safe. Canadians are asked to report their exposure to toxic long-term disability benefits at the following website www.toxicinsurance.ca.
Bill S-216 has a Transitional Provision that makes it applicable to the Nortel LTD employees since it applies to all current CCAA (Companies' Creditors Arrangement Act) and BIA (Bankruptcy and Insolvency Act) proceedings that are not yet closed.
Adoption of Bill S-216 has become our last resort since on June 3rd, the Court of Appeal of Ontario refused to grant us Leave to Appeal our March 31st Nortel Settlement Agreement. This agreement pays us benefits for the balance of 2010, but denies us the right to seek remedy for over $100 million missing in the Nortel Health and Welfare Trust. Nortel self-insured our long-term benefits saying it was playing the role of an insurance company, and then it committed a breach of trust by misappropriating our assets in the Health and Welfare Trust.
For many years, Nortel did not make the employer contributions required according to our trustee agreement, nor did it properly account for the employee contributions that we made to increase our wage replacement coverage from 50% to 70% of our pre disability earnings. Also, Nortel borrowed one third of our money in the trust to finance its own operations and did not return it to us prior to bankruptcy, despite having more than $2 billion of cash on its balance sheet at the time. We are expecting that the Nortel Health and Welfare Trust will be wound-up at December 31st 2010 or later.
We need revisions in the current Nortel Hardship Test so that it will apply to us as long-term disabled employees. We face an expected 83% drop in our wage replacement income and only 17% funding of our essential medicines, therapies, treatments, and medical equipment, beginning on January 1, 2011.
Nortel disabled persons who earned $50,000 before they got sick will have their effective income after medical bills go down to $13,700 per year. We cannot survive on this amount.
Those of us, like Peter Burns, Carol Samson and Josee Marin and others with over $8000 per year of medical costs will be driven to as low an income after medical bills of $2,500 per year.
Nortel is forcing us to become a burden on Canadian taxpayers even though there is estimated to be $6 billion in the Nortel global estate. With Bill S-216 implemented, we expect that there will be sufficient money in the Nortel Canada estate to solve our crisis and to not in any way disrupt the Nortel liquidation under CCAA.
Bill S-216 returns money to the long-term disabled who are trust beneficiaries that was supposed to be in the trust accounts, and that does not rightfully belong to other creditor groups in the bankruptcy estate. Distinct priority for the disabled addresses our special vulnerability of illness, the misrepresentations and unsafeness of our self-insured benefits, and the expected inadequacy of funding in the Nortel Canada Estate, to pay for all of the retirees and severed employees, as well as our own long-term disability claims.
FOR FURTHER INFORMATION, PLEASE CONTACT: Greg McAvoy 403 288-5568
jgmcavoy@... Borenstein (Plante) 613 692-5461
arleneplante@... Marin 613 678-2960 marin.josee@...
(Bilingual)Peter Burns 613 808-8800 snrub.retep@... Connie Walsh
613 424-1146 connie@...
Rights For Nortel Disabled Employees (RFNDE)(A Self-Advocacy Group) On the web: www.protectourtomorrow.comIncident Reporting:
www.toxicinsurance.caOn Twitter: https://twitter.com/rfndeJoin us on facebook: Rights For Nortel Disabled Employees
Help Us Get An Amendment to the Bankruptcy Act!Support Senator Eggleton's Bill
S-216!
RIGHTS FOR NORTEL DISABLED EMPLOYEES
Media Release (Update)
Friday, June 18, 2010, 10:00 A.M. We are relieved to hear that Bill S-216 passed Second Reading in the Senate on Thursday, June 17th. This bill legislates preferred status of the long term disability benefit claims, over other unsecured creditors in Federal bankruptcy laws.
Senator Art Eggleton's Bill S-216 - LTD Benefits in Bankruptcy. This Second Reading refers Bill S-216 to the Senate Banking, Trade and Commerce Committee for further study. Conservative Senator Percy Mockler spoke to Bill S-216 from the Conservative side of the Senate today. We understand that his Party is, in principle, supportive of Bill S-216.
The Conservatives want the Senate Banking,Trade and Commerce Committee to study the bill with care, to ensure there are no unintended consequences. We thank the Liberal Party for introducing Bill S-216 and the NDP, Bloc Québécois and Green Parties for giving their support to this important Bill. We urge the Senate Banking, Trade and Commerce Committee to begin hearing witnesses on the Bill immediately. Bill S-216 cures a toxic insurance problem that over 1.1 million Canadians are exposed to because their long-term disability benefits at work are self-insured. One in 10 Canadians with long-term disability benefits at work have the unsafe self-insured kind.
The Rights For Nortel Disabled Employees Group are asking Canadian employees to check whether their long-term disability benefits are insured and safe. Canadians are asked to report their exposure to toxic long-term disability benefits at the following website www.toxicinsurance.ca.
Bill S-216 has a Transitional Provision that makes it applicable to the Nortel LTD employees since it applies to all current CCAA (Companies' Creditors Arrangement Act) and BIA (Bankruptcy and Insolvency Act) proceedings that are not yet closed.
Adoption of Bill S-216 has become our last resort since on June 3rd, the Court of Appeal of Ontario refused to grant us Leave to Appeal our March 31st Nortel Settlement Agreement. This agreement pays us benefits for the balance of 2010, but denies us the right to seek remedy for over $100 million missing in the Nortel Health and Welfare Trust. Nortel self-insured our long-term benefits saying it was playing the role of an insurance company, and then it committed a breach of trust by misappropriating our assets in the Health and Welfare Trust.
For many years, Nortel did not make the employer contributions required according to our trustee agreement, nor did it properly account for the employee contributions that we made to increase our wage replacement coverage from 50% to 70% of our pre disability earnings. Also, Nortel borrowed one third of our money in the trust to finance its own operations and did not return it to us prior to bankruptcy, despite having more than $2 billion of cash on its balance sheet at the time. We are expecting that the Nortel Health and Welfare Trust will be wound-up at December 31st 2010 or later.
We need revisions in the current Nortel Hardship Test so that it will apply to us as long-term disabled employees. We face an expected 83% drop in our wage replacement income and only 17% funding of our essential medicines, therapies, treatments, and medical equipment, beginning on January 1, 2011.
Nortel disabled persons who earned $50,000 before they got sick will have their effective income after medical bills go down to $13,700 per year. We cannot survive on this amount.
Those of us, like Peter Burns, Carol Samson and Josee Marin and others with over $8000 per year of medical costs will be driven to as low an income after medical bills of $2,500 per year.
Nortel is forcing us to become a burden on Canadian taxpayers even though there is estimated to be $6 billion in the Nortel global estate. With Bill S-216 implemented, we expect that there will be sufficient money in the Nortel Canada estate to solve our crisis and to not in any way disrupt the Nortel liquidation under CCAA.
Bill S-216 returns money to the long-term disabled who are trust beneficiaries that was supposed to be in the trust accounts, and that does not rightfully belong to other creditor groups in the bankruptcy estate. Distinct priority for the disabled addresses our special vulnerability of illness, the misrepresentations and unsafeness of our self-insured benefits, and the expected inadequacy of funding in the Nortel Canada Estate, to pay for all of the retirees and severed employees, as well as our own long-term disability claims.
FOR FURTHER INFORMATION, PLEASE CONTACT: Greg McAvoy 403 288-5568
jgmcavoy@... Borenstein (Plante) 613 692-5461
arleneplante@... Marin 613 678-2960 marin.josee@...
(Bilingual)Peter Burns 613 808-8800 snrub.retep@... Connie Walsh
613 424-1146 connie@...
Rights For Nortel Disabled Employees (RFNDE)(A Self-Advocacy Group) On the web: www.protectourtomorrow.comIncident Reporting:
www.toxicinsurance.caOn Twitter: https://twitter.com/rfndeJoin us on facebook: Rights For Nortel Disabled Employees
Help Us Get An Amendment to the Bankruptcy Act!Support Senator Eggleton's Bill
S-216!
Thursday, June 17, 2010
US Retiree medical benefits
Regarding the US Retiree medical benefits.
Some people have communicated that they received a notice in the mail today that effective September 1st, 2010 Nortel will no longer be providing employer-subsidized retiree medical benefits along with the optional long-term care plan and retiree life insurance.
The notice said that Nortel has made arrangements for Nortel's 65-and-over population along with approx 95% of the under 65 retirees who live in state where UnitedHealthcare or an affiliated company to purchase replacement insurance at a rate that does not factor in medical history or tobacco use. The UnitedHealthcare information kits are expected to arrive by mail in mid-July.
When I get more information I will post it here.
Some people have communicated that they received a notice in the mail today that effective September 1st, 2010 Nortel will no longer be providing employer-subsidized retiree medical benefits along with the optional long-term care plan and retiree life insurance.
The notice said that Nortel has made arrangements for Nortel's 65-and-over population along with approx 95% of the under 65 retirees who live in state where UnitedHealthcare or an affiliated company to purchase replacement insurance at a rate that does not factor in medical history or tobacco use. The UnitedHealthcare information kits are expected to arrive by mail in mid-July.
When I get more information I will post it here.
Wednesday, June 16, 2010
Ernst & Young report # 48 on Canadian Claims
The monitor Ernst & Young has filed a 48th report with the Canadian court listing their summary of the claims against Nortel in Canada. They also have proposed the appointment of Donald Brenner QC, Bill Horton and Andrew Diamond as claims officers to assist in the determination of any disputed claims the Monitor may refer to any one of them.
The following is a summary of claims from the report:
Claims in CAD $
Real Estate ---------- 10 claim-------- value $ 272M
Employee--------------106 claims------- value $16M
Equity ---------------127 claims------- value $11M
Late claims----------- 25 claims------- value $4M
Litigation ------------13 claims------- value $1,043M
NNI / Inter-company---- 1 claim-------- value $2,063M
Pension & Benefits---- 32 claims ------ value $7,241M
Real Estate----------- 15 claims------- value $281M
Tax & Governmental--- 18 claims------- value $2M
Trade Payables------- 416 claims------- value $7,910M
Treasury --------------21 claims------- value $10,347M
Other-----------------178 claims------- value $1,161M
Total --------------- 962 claims------- value $30,352M
I don't understand the pension and benefits claims since the claims process has not yet been established. This may be a place marker set of claims.
The claims include; Nortel Networks Corporation; Nortel Networks Global Corporation; Nortel Networks International Corporation; Nortel Networks Limited; and Nortel Networks Technology corporation.
The high value of all these claims $30,352M is very unsettling. There must be ovelaps and invalid claims in this total list. I hope that Koskie Minsky will be involved in any claims review to ensure that our claims are fully represented and that other claims are properly validated.
This shows the urgency to fix the BIA and CCAA laws. If we retirees and LTD people have to wait our turn and take what's left once the assets have been divvied up there is little hope of us getting anything to top up the underfunded trust funds. If Nortel's assets are only $6 billion world wide after all the sales, and if Canada gets allocated only $1 to $2 billion of that amount (and that is being very optimistic) then the unsecured creditors will only get 3 to 6 cents on the dollar. Which means we may get an extra 1% or so on our pension. Not much to look forward to.
The following is a summary of claims from the report:
Claims in CAD $
Real Estate ---------- 10 claim-------- value $ 272M
Employee--------------106 claims------- value $16M
Equity ---------------127 claims------- value $11M
Late claims----------- 25 claims------- value $4M
Litigation ------------13 claims------- value $1,043M
NNI / Inter-company---- 1 claim-------- value $2,063M
Pension & Benefits---- 32 claims ------ value $7,241M
Real Estate----------- 15 claims------- value $281M
Tax & Governmental--- 18 claims------- value $2M
Trade Payables------- 416 claims------- value $7,910M
Treasury --------------21 claims------- value $10,347M
Other-----------------178 claims------- value $1,161M
Total --------------- 962 claims------- value $30,352M
I don't understand the pension and benefits claims since the claims process has not yet been established. This may be a place marker set of claims.
The claims include; Nortel Networks Corporation; Nortel Networks Global Corporation; Nortel Networks International Corporation; Nortel Networks Limited; and Nortel Networks Technology corporation.
The high value of all these claims $30,352M is very unsettling. There must be ovelaps and invalid claims in this total list. I hope that Koskie Minsky will be involved in any claims review to ensure that our claims are fully represented and that other claims are properly validated.
This shows the urgency to fix the BIA and CCAA laws. If we retirees and LTD people have to wait our turn and take what's left once the assets have been divvied up there is little hope of us getting anything to top up the underfunded trust funds. If Nortel's assets are only $6 billion world wide after all the sales, and if Canada gets allocated only $1 to $2 billion of that amount (and that is being very optimistic) then the unsecured creditors will only get 3 to 6 cents on the dollar. Which means we may get an extra 1% or so on our pension. Not much to look forward to.
Monday, June 14, 2010
Friday, June 11, 2010
NRPC US update
I received the following email from the US NRPC.
The email says that the US NRPC are ceasing formal operations and refunding some money to members who did not use Segal to calculate their claims. Those NRPC members who used Segal will not recieve anything back since all the money has been spent on that effort, and the earlier attempt to have legal representation on the creditor's comittee.
Here's the official email:
NUSRPC Members Update June 9, 2010
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
It has been eight months since our last status update. This long period was primarily due to the fact that there has been little new information made public about which the NUSRPC could report to you. Prior to the claims bar date the NUSRPC, working with Segal Co, was able to assist 195 of our 421 members to file claims for Non-Qualified pensions before the September 30 bar date.
Since then, Nortel has continued to sell off its assets. The U.K. administrator has made various appeals to Canadian and U.S. Bankruptcy courts.. These actions and others are still being under consideration by the Courts.
In our last members update the questions which remained unanswered were:
1. When will Nortel petition the U.S. court for permission to cease benefits?
2. What will be the court's reaction to the petition? Will the court choose to grant the petition outright or impose certain conditions or negotiations?
3. Will COBRA be available as a temporary alternative for former employees?
None of these questions have been answered eight months later. Last October our hope was that a court ruling might provide the NUSRPC with an opportunity to create an alternate benefit plan option which could be made available to all former employees. The NUSRPC decided to defer refunding the remaining membership funds in case funds were required to create an alternate medical plan.
Since last October, however, we believe it is less likely that the NUSRPC will be able to provide a viable and attractive benefit plan primarily due to Congress' passage of the Affordable Healthcare Act.
As a result we feel that it is time to refund the remaining monies held by the NUSRPC to those who did not use Segal's services.
We plan to issue refund checks by mail in the near future. In order to avoid sending checks to incorrect addresses we need to double check our mailing address list.
If you are a paid member of the NUSRPC and if YOU DID NOT USE SEGAL CO.'s SERVICES to calculate a pension claim, and your physical (not email) mailing address has changed since January 2009, please reply to this email with your name and current mailing address. It will take us a few weeks to correct the address information we have and to manually write and mail checks. We apologize for the delay but remember that we are volunteers, many of whom have full time jobs.
The following is an explanation of how we will calculate refunds. There have been two major disbursements of membership funds
1. A payment of fees to Miller and Martin, a law firm we employed to represent our interests within bankruptcy court. The relationship with Miller and Martin ended in mid-2009. All NUSRPC members will share equally in this expense.
2. A payment of fees to Segal Co. for the 195 members who used Segal Co. services to calculate pension claims. These per capita fees amounted to $184 per person. This, with the fees to Miller and Martin consumed all of the membership funds for these 195 people and no further refund will be available for this group.
Those who did not use Segal Co. services will receive a check for $184 - the same amount as the charges assessed to those who did receive these services. This method will ensure that all members receive either an equal benefit or an equal refund.
This method will leave just enough funds to cover the preparation, postage and mailing of the refund checks. Should any small amount remain after these costs it will be donated to a charity selected by NUSRPC leadership.
Although these refunds will bring an end to the formal role and resources of the NUSRPC we will continue our best efforts to play an informal role in informing our membership should any important new information become available. We wish to thank our regional coordinators and all of those who pitched in over the last 18 months to ensure that our interests were represented in this long bankruptcy process.
NUSRPC
The email says that the US NRPC are ceasing formal operations and refunding some money to members who did not use Segal to calculate their claims. Those NRPC members who used Segal will not recieve anything back since all the money has been spent on that effort, and the earlier attempt to have legal representation on the creditor's comittee.
Here's the official email:
NUSRPC Members Update June 9, 2010
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
It has been eight months since our last status update. This long period was primarily due to the fact that there has been little new information made public about which the NUSRPC could report to you. Prior to the claims bar date the NUSRPC, working with Segal Co, was able to assist 195 of our 421 members to file claims for Non-Qualified pensions before the September 30 bar date.
Since then, Nortel has continued to sell off its assets. The U.K. administrator has made various appeals to Canadian and U.S. Bankruptcy courts.. These actions and others are still being under consideration by the Courts.
In our last members update the questions which remained unanswered were:
1. When will Nortel petition the U.S. court for permission to cease benefits?
2. What will be the court's reaction to the petition? Will the court choose to grant the petition outright or impose certain conditions or negotiations?
3. Will COBRA be available as a temporary alternative for former employees?
None of these questions have been answered eight months later. Last October our hope was that a court ruling might provide the NUSRPC with an opportunity to create an alternate benefit plan option which could be made available to all former employees. The NUSRPC decided to defer refunding the remaining membership funds in case funds were required to create an alternate medical plan.
Since last October, however, we believe it is less likely that the NUSRPC will be able to provide a viable and attractive benefit plan primarily due to Congress' passage of the Affordable Healthcare Act.
As a result we feel that it is time to refund the remaining monies held by the NUSRPC to those who did not use Segal's services.
We plan to issue refund checks by mail in the near future. In order to avoid sending checks to incorrect addresses we need to double check our mailing address list.
If you are a paid member of the NUSRPC and if YOU DID NOT USE SEGAL CO.'s SERVICES to calculate a pension claim, and your physical (not email) mailing address has changed since January 2009, please reply to this email with your name and current mailing address. It will take us a few weeks to correct the address information we have and to manually write and mail checks. We apologize for the delay but remember that we are volunteers, many of whom have full time jobs.
The following is an explanation of how we will calculate refunds. There have been two major disbursements of membership funds
1. A payment of fees to Miller and Martin, a law firm we employed to represent our interests within bankruptcy court. The relationship with Miller and Martin ended in mid-2009. All NUSRPC members will share equally in this expense.
2. A payment of fees to Segal Co. for the 195 members who used Segal Co. services to calculate pension claims. These per capita fees amounted to $184 per person. This, with the fees to Miller and Martin consumed all of the membership funds for these 195 people and no further refund will be available for this group.
Those who did not use Segal Co. services will receive a check for $184 - the same amount as the charges assessed to those who did receive these services. This method will ensure that all members receive either an equal benefit or an equal refund.
This method will leave just enough funds to cover the preparation, postage and mailing of the refund checks. Should any small amount remain after these costs it will be donated to a charity selected by NUSRPC leadership.
Although these refunds will bring an end to the formal role and resources of the NUSRPC we will continue our best efforts to play an informal role in informing our membership should any important new information become available. We wish to thank our regional coordinators and all of those who pitched in over the last 18 months to ensure that our interests were represented in this long bankruptcy process.
NUSRPC
Wednesday, June 9, 2010
CARP article on bIll C-501 hold up.
Story published by the Canadian Association for Retired Persons.
Bill C-501 is held up by parliamentary procedure on purpose to prevent pensioners from getting preferred treatment in the case of bankruptcy.
You can read the detail and other information on CARP at:
http://www.carp.ca/advocacy/adv-article-display.cfm?documentid=4816&adv_section=\
2
Here's the article.
BILL C-501: DID THE GOVERNMENT'S SUDDEN LOVE AFFAIR WITH PARLIAMENTARY PROCEDURE
STALL LONG OVERDUE LEGISLATION TO PROTECT PENSIONERS IN A BANKRUPTCY?
While Parliamentary procedure is by no means a rousing topic of conversation for most Canadians, the intricate rules that guide our parliamentary democracy have increasingly become the tools of choice for trying to dodge hot-button issues. The drawn-out saga that is Bill 501- a private member's bill that would place pensioners ahead of other creditors such as banks and insurance companies in the event of company bankruptcies - reveals the government's growing penchant for evoking parliamentary procedure to skirt around the pressing issues surrounding Canada's retirement income system. While private member's bills rarely become law, the relevance of Bill C-501 to the crisis currently afflicting Nortel pensioners allowed the concept of heightened protection for pensioners in the event of bankruptcy to garner unanimous, if qualified, support from both government and opposition parities....
Last June, all parties supported, in principle, a Parliamentary Motion that included a call for preferred creditor status for pensioners in bankruptcy proceedings. The recent Throne Speech included a declaration that "Our Government will also explore ways to better protect workers when their employers go bankrupt." Bill 501 would have fulfilled this promise. However, the government invoked a technical element of parliamentary protocol and asked the Speaker to rule the Bill out of order.
Prior to the second reading vote on Bill C-501, the government pointed out that Bill C-501 allows for the appointment of adjudicators by the Minister of Labour in connection with claims related to bankruptcy proceedings. Since Private Member's Bills cannot require the expenditure of public funds, the government indicated that the bill could not be passed. On Wednesday, the Speaker of the House of Commons ruled that since the clause permitting the appointment of adjudicators would require government spending, the bill could be put to a second reading vote and proceed to committee, but not return to the House of Commons for final reading. Click here to read the Speaker's Ruling.
Bill c-501 passed second reading by a vote of 144 to 111 and was referred to the Industry Committee for further debate. After the committee hearings Bill C-501 will be nullified unless the Speaker's ruling is appealed and overturned – OR the government adopts the Bill. Is it possible that the government intends to do this but wanted to fulfill its promise on its own rather than allow an opposition bill to do it?
While it is a true that clause 6 of bill 501 conflicts with the rules governing private member's bills, it is equally true that inter-party collaboration and behind the scenes consultation on matters regarding the matters of parliamentary protocol is one of the key conventions of national and provincial legislatures. Indeed, one of the most important practices within the House of Commons is regular meetings of the house leaders of all four parties to address procedural issues.
In the case of bill C-501, there is also ambiguity about the necessity of prohibiting the bill's passage to third reading since the offending clause could have been removed from the bill altogether during the committee stage. These realities of parliamentary practice suggest that a lack of political will to confer preferred creditor status on employees caught in a bankruptcy proceeding- rather than a scrupulous regard for parliamentary procedure- may be the real force behind the stoppage of bill c-501
Bill C-501 is held up by parliamentary procedure on purpose to prevent pensioners from getting preferred treatment in the case of bankruptcy.
You can read the detail and other information on CARP at:
http://www.carp.ca/advocacy/adv-article-display.cfm?documentid=4816&adv_section=\
2
Here's the article.
BILL C-501: DID THE GOVERNMENT'S SUDDEN LOVE AFFAIR WITH PARLIAMENTARY PROCEDURE
STALL LONG OVERDUE LEGISLATION TO PROTECT PENSIONERS IN A BANKRUPTCY?
While Parliamentary procedure is by no means a rousing topic of conversation for most Canadians, the intricate rules that guide our parliamentary democracy have increasingly become the tools of choice for trying to dodge hot-button issues. The drawn-out saga that is Bill 501- a private member's bill that would place pensioners ahead of other creditors such as banks and insurance companies in the event of company bankruptcies - reveals the government's growing penchant for evoking parliamentary procedure to skirt around the pressing issues surrounding Canada's retirement income system. While private member's bills rarely become law, the relevance of Bill C-501 to the crisis currently afflicting Nortel pensioners allowed the concept of heightened protection for pensioners in the event of bankruptcy to garner unanimous, if qualified, support from both government and opposition parities....
Last June, all parties supported, in principle, a Parliamentary Motion that included a call for preferred creditor status for pensioners in bankruptcy proceedings. The recent Throne Speech included a declaration that "Our Government will also explore ways to better protect workers when their employers go bankrupt." Bill 501 would have fulfilled this promise. However, the government invoked a technical element of parliamentary protocol and asked the Speaker to rule the Bill out of order.
Prior to the second reading vote on Bill C-501, the government pointed out that Bill C-501 allows for the appointment of adjudicators by the Minister of Labour in connection with claims related to bankruptcy proceedings. Since Private Member's Bills cannot require the expenditure of public funds, the government indicated that the bill could not be passed. On Wednesday, the Speaker of the House of Commons ruled that since the clause permitting the appointment of adjudicators would require government spending, the bill could be put to a second reading vote and proceed to committee, but not return to the House of Commons for final reading. Click here to read the Speaker's Ruling.
Bill c-501 passed second reading by a vote of 144 to 111 and was referred to the Industry Committee for further debate. After the committee hearings Bill C-501 will be nullified unless the Speaker's ruling is appealed and overturned – OR the government adopts the Bill. Is it possible that the government intends to do this but wanted to fulfill its promise on its own rather than allow an opposition bill to do it?
While it is a true that clause 6 of bill 501 conflicts with the rules governing private member's bills, it is equally true that inter-party collaboration and behind the scenes consultation on matters regarding the matters of parliamentary protocol is one of the key conventions of national and provincial legislatures. Indeed, one of the most important practices within the House of Commons is regular meetings of the house leaders of all four parties to address procedural issues.
In the case of bill C-501, there is also ambiguity about the necessity of prohibiting the bill's passage to third reading since the offending clause could have been removed from the bill altogether during the committee stage. These realities of parliamentary practice suggest that a lack of political will to confer preferred creditor status on employees caught in a bankruptcy proceeding- rather than a scrupulous regard for parliamentary procedure- may be the real force behind the stoppage of bill c-501
Friday, June 4, 2010
Canadian Court of Appeal decision on Nortel LTD case
The following was released by Koskie Minsky June 3 2010.
The Court of Appeal released its decision today denying leave to appeal on a motion that was heard in writing on May 31, 2010. A group of individuals sought leave to appeal the March 31 decision of the Ontario Superior Court of Justice, which approved a Settlement Agreement reached by various parties on March 30, 2010. The Settlement Agreement provides for the continuation of LTD income, medical, dental and life insurance benefits through 2010, and also for a lump sum payment as an advance distribution to certain eligible terminated employees.
In my opinion the LTD employees should have been treated differently to retirees and ex-employees. LTD employees are essentially still part of Nortel until they are terminated. They have been lumped in with retirees and others and have not been given any choice to have separate representation by the court. Their specific needs have been overshadowed by the pensioners and they have not received reasonable treatment by the courts, by the government, by Nortel, by the NRPC, and by Koskie Minsky.
We retiree stand to lose 30% or more of our pensions. LTD people may lose their lives as a result of the agreement struck earlier this year. Their benefits will stop entirely as of Jan 1 2011 except for some miniscule payments from a totally inadequate trust fund.
Nortel and the Canadian Government are at fault in not ensuring that a proper hands off trust fund was established so that LTD people could continue to live with proper support until they can draw a pension. This is shameful treatment of people who deserve better than this.
The Court of Appeal released its decision today denying leave to appeal on a motion that was heard in writing on May 31, 2010. A group of individuals sought leave to appeal the March 31 decision of the Ontario Superior Court of Justice, which approved a Settlement Agreement reached by various parties on March 30, 2010. The Settlement Agreement provides for the continuation of LTD income, medical, dental and life insurance benefits through 2010, and also for a lump sum payment as an advance distribution to certain eligible terminated employees.
In my opinion the LTD employees should have been treated differently to retirees and ex-employees. LTD employees are essentially still part of Nortel until they are terminated. They have been lumped in with retirees and others and have not been given any choice to have separate representation by the court. Their specific needs have been overshadowed by the pensioners and they have not received reasonable treatment by the courts, by the government, by Nortel, by the NRPC, and by Koskie Minsky.
We retiree stand to lose 30% or more of our pensions. LTD people may lose their lives as a result of the agreement struck earlier this year. Their benefits will stop entirely as of Jan 1 2011 except for some miniscule payments from a totally inadequate trust fund.
Nortel and the Canadian Government are at fault in not ensuring that a proper hands off trust fund was established so that LTD people could continue to live with proper support until they can draw a pension. This is shameful treatment of people who deserve better than this.
Foreign service tax impact. Koskie Minsky update
Koskie Minsky placed the following statement on their website June 1 2010.
Over the past several months, parties have been seeking to resolve a number of tax issues that have arisen during Nortel's CCAA proceedings, which has led to a dialogue with the Canada Revenue Agency (the "CRA"). The CRA has been provided with written submissions on three tax issues, including issues that involve foreign service earnings, Pension Adjustment Reversals ("PAR") and tax on cash payments of the commuted value of registered pensions. The CRA is now actively studying these issues and we expect a reply in the coming weeks. While the CRA continues to express a willingness to consider potential solutions, we cannot provide you with further information until such time as the CRA completes its analysis and provides us with its position. We will advise on these issues as soon as possible.
Over the past several months, parties have been seeking to resolve a number of tax issues that have arisen during Nortel's CCAA proceedings, which has led to a dialogue with the Canada Revenue Agency (the "CRA"). The CRA has been provided with written submissions on three tax issues, including issues that involve foreign service earnings, Pension Adjustment Reversals ("PAR") and tax on cash payments of the commuted value of registered pensions. The CRA is now actively studying these issues and we expect a reply in the coming weeks. While the CRA continues to express a willingness to consider potential solutions, we cannot provide you with further information until such time as the CRA completes its analysis and provides us with its position. We will advise on these issues as soon as possible.
John Rafferty's statement on Bill C-501
NewsPress Releases Statements
From the House Rafferty.J@parl.gc.ca
Constituency Offices:
May 31 2010
I returned to Ottawa last week for the final stretch of parliamentary sitting days before the summer break period, and what a great week it was. My Private Members’ Bill C-501 came up for its first test in the House of Commons, and I am pleased to report that it passed with flying colours (144-111).
For those who do not know, C-501 could secure the pensions of all Canadians whose employers have undertaken restructuring, entered bankruptcy protection, or have collapsed entirely and had their assets sold off. This bill should ensure that the pensions of over 6 million Canadians will be \ there when they need them.
This week’s vote at ‘second reading’ for C-501 followed two hours of debate and numerous conversations with other Members of Parliament. After the debate and meetings ended the positions of the other parties became somewhat clearer. The Bloc would support the bill, as would many Liberals, but the Conservatives suggested that most would not be supportive of C-501 moving forward. Many Conservative MPs spoke out in opposition while others raised seemingly small points about the wording of the bill, but the overall message was clear; the Conservatives plan to challenge C-501 at all stages.
Instead of siding with hard-working Canadian men and women who have earned their wages, pensions and a dignified retirement, most of the Conservatives caucus decided to take the side of the ‘vulture capitalists’ who specialize in generating profits from bankrupt companies and shadowy backroom financiers like those who used to work at Lehman Brothers. As it stands now, pension funds are actually behind junk bond traders when it comes to who gets their money back first when a company goes under, and by and large the Conservatives seem to like it that way.
While I have noted that much of the opposition to my bill is coming from the government side, I must take a moment to give some credit to the 12 Conservative MPs who seem to ‘get-it’ when it comes to the need to reform the pension and bankruptcy laws in Canada. Their support was crucial to getting this bill past its first vote, and I will be calling each of them to thank them and find out ways to improve the bill so that all of their Conservative colleagues can feel comfortable in supporting C-501 in committee and voting for it when it returns to the House and Senate later this year.
So where does that leave us? Well, C-501 is now headed to the Industry committee, where there will be some testimony from experts, citizens, and other stakeholders. We will also be making some amendments to the bill to make it easier to support for those skittish Conservative MPs who seem to be misinformed and unaware of why this bill is needed now more than ever.
I hope that the rest of the Conservative caucus in Ottawa will see the light when it comes to pension protection and work with me to make C-501 the law as quickly as possible. As always, I will be sure to keep you informed as our bill moves forward.
Until then, John.
From the House Rafferty.J@parl.gc.ca
Constituency Offices:
May 31 2010
I returned to Ottawa last week for the final stretch of parliamentary sitting days before the summer break period, and what a great week it was. My Private Members’ Bill C-501 came up for its first test in the House of Commons, and I am pleased to report that it passed with flying colours (144-111).
For those who do not know, C-501 could secure the pensions of all Canadians whose employers have undertaken restructuring, entered bankruptcy protection, or have collapsed entirely and had their assets sold off. This bill should ensure that the pensions of over 6 million Canadians will be \ there when they need them.
This week’s vote at ‘second reading’ for C-501 followed two hours of debate and numerous conversations with other Members of Parliament. After the debate and meetings ended the positions of the other parties became somewhat clearer. The Bloc would support the bill, as would many Liberals, but the Conservatives suggested that most would not be supportive of C-501 moving forward. Many Conservative MPs spoke out in opposition while others raised seemingly small points about the wording of the bill, but the overall message was clear; the Conservatives plan to challenge C-501 at all stages.
Instead of siding with hard-working Canadian men and women who have earned their wages, pensions and a dignified retirement, most of the Conservatives caucus decided to take the side of the ‘vulture capitalists’ who specialize in generating profits from bankrupt companies and shadowy backroom financiers like those who used to work at Lehman Brothers. As it stands now, pension funds are actually behind junk bond traders when it comes to who gets their money back first when a company goes under, and by and large the Conservatives seem to like it that way.
While I have noted that much of the opposition to my bill is coming from the government side, I must take a moment to give some credit to the 12 Conservative MPs who seem to ‘get-it’ when it comes to the need to reform the pension and bankruptcy laws in Canada. Their support was crucial to getting this bill past its first vote, and I will be calling each of them to thank them and find out ways to improve the bill so that all of their Conservative colleagues can feel comfortable in supporting C-501 in committee and voting for it when it returns to the House and Senate later this year.
So where does that leave us? Well, C-501 is now headed to the Industry committee, where there will be some testimony from experts, citizens, and other stakeholders. We will also be making some amendments to the bill to make it easier to support for those skittish Conservative MPs who seem to be misinformed and unaware of why this bill is needed now more than ever.
I hope that the rest of the Conservative caucus in Ottawa will see the light when it comes to pension protection and work with me to make C-501 the law as quickly as possible. As always, I will be sure to keep you informed as our bill moves forward.
Until then, John.
Thursday, June 3, 2010
Bill C-501 may not be debated until November.
John Rafferty, in a response to an email from another Nortel retiree, said the following:
Bill C-501 is not likely to be discussed in the Industry committee until November, and at that time, the issue of amending the bill to be retroactive will be debated and discussed.
If this is the case, then it will be after we have had our pensions cut in October. The positive thing is that retroactivity may be discussed and included. To help us however, it would be better if the law was enacted retroactively before any administrator tried to convert our pensions to annuities.
Bill C-501 is not likely to be discussed in the Industry committee until November, and at that time, the issue of amending the bill to be retroactive will be debated and discussed.
If this is the case, then it will be after we have had our pensions cut in October. The positive thing is that retroactivity may be discussed and included. To help us however, it would be better if the law was enacted retroactively before any administrator tried to convert our pensions to annuities.
Wednesday, June 2, 2010
BC Columnist supports Pension Protection
An article by Ronald McCraig,a the Victoria Times columnist, expresses the sentiments that we would all like to ss other journalists copy in the media.
Pension protection is long overdue
==================================
By Ronald McCaig, Times Colonist June 1, 2010
On May 26, Parliament voted to move forward a private member's bill that would give pension obligations a "secured" status when companies go bankrupt. Currently, pensions sit near the bottom of the list of creditors. This is why those who worked at Nortel and other bankrupt companies are having their pensions slashed even as junk bond holders and executives walk away with millions.
Bill C-501 would address this travesty. Arguably it would also reduce the incentive for "strategic" bankruptcies.
With two million Canadians in corporate pension plans, many underfunded, and companies failing every day, there are hundreds of thousands of Canadians who might benefit if this bill becomes law.
The Conservatives reneged on earlier promises to support this kind of reform, citing the potential for increased cost of corporate borrowing. They will do their best to see that C-501 dies before becoming law. Their position would be more credible if they presented an alternative solution, or explained why legislation that protects pensioners in other countries will not work in Canada. Indeed, of 53 countries in the OECD-World Bank group, 40 have found a way to protect pensions in bankruptcy. Canada along with Tunisia, Lithuania and a handful of others simply abandon their pensioners.
Bill C-501 stayed alive for now because the NDP and Bloc Québécois turned out in force to support it, as did many Liberals, and because a handful of Conservative MPs voted their conscience rather than the party line. Sadly none were from B.C.
Ronald McCaig
Port Alberni
© Copyright (c) The Victoria Times Colonist
Read more:
http://www.timescolonist.com/opinion/Pension+protection+long+overdue/3095985/sto\
ry.html
Pension protection is long overdue
==================================
By Ronald McCaig, Times Colonist June 1, 2010
On May 26, Parliament voted to move forward a private member's bill that would give pension obligations a "secured" status when companies go bankrupt. Currently, pensions sit near the bottom of the list of creditors. This is why those who worked at Nortel and other bankrupt companies are having their pensions slashed even as junk bond holders and executives walk away with millions.
Bill C-501 would address this travesty. Arguably it would also reduce the incentive for "strategic" bankruptcies.
With two million Canadians in corporate pension plans, many underfunded, and companies failing every day, there are hundreds of thousands of Canadians who might benefit if this bill becomes law.
The Conservatives reneged on earlier promises to support this kind of reform, citing the potential for increased cost of corporate borrowing. They will do their best to see that C-501 dies before becoming law. Their position would be more credible if they presented an alternative solution, or explained why legislation that protects pensioners in other countries will not work in Canada. Indeed, of 53 countries in the OECD-World Bank group, 40 have found a way to protect pensions in bankruptcy. Canada along with Tunisia, Lithuania and a handful of others simply abandon their pensioners.
Bill C-501 stayed alive for now because the NDP and Bloc Québécois turned out in force to support it, as did many Liberals, and because a handful of Conservative MPs voted their conscience rather than the party line. Sadly none were from B.C.
Ronald McCaig
Port Alberni
© Copyright (c) The Victoria Times Colonist
Read more:
http://www.timescolonist.com/opinion/Pension+protection+long+overdue/3095985/sto\
ry.html
Royal Assent needed for Bill C-501
See the Canadian Parliament discourse in the debate on Bill C-501 at the following site:
http://openparliament.ca/bills/2201/
It seems that because Bill C-501 contains a clause that requires an adjudicator in case of dispute, and that might mean spending public funds, the bill has to receive assent by the governor general before it can be voted on in the house of commons.
I'm not sure what that means in terms of delay or if it will not be allowed for a vote.
As things become clearer I will publish what I find out.
http://openparliament.ca/bills/2201/
It seems that because Bill C-501 contains a clause that requires an adjudicator in case of dispute, and that might mean spending public funds, the bill has to receive assent by the governor general before it can be voted on in the house of commons.
I'm not sure what that means in terms of delay or if it will not be allowed for a vote.
As things become clearer I will publish what I find out.
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