Docket #3835 on the Epiq Website contains a copy of Nortel US's latest operations report. According to the report the operating revenue for June 2010 was $12M US. A far cry from the multiple hundreds of millions of dollars per month that was normal in the last years that I worked there.
The total assets of NNI is $1,642M US ,and the total liabilities is $5,923M US.
Within those liabilities there is $5,583M US subject to compromise. These include $206M trade and other accounts payable; $377M intercompany A.P.; $125M restructuring; $3,391M NNI debt guarantee; $183M long term debt; $36M Financial Obligations; $426M pension obligations; $293 post retirement obligations other than pensions; $127m Notes and Interest Intercompany; and $59M other.
As of June 30,2010 NNI has received 7,316 claims asserting approximately $16,369M in outstanding claims. Certain claims may be duplicated in multiple jurisdictions or may be overstated, or may be erroneous. NNI has an ongoing process to investigate filed proof of claims to determine legitimacy.
Divestiture proceeds received by Nortel amounts to $3,083M, of which $2,797 is held in escrow and $214 from the sale of LGN is included in restricted cash reported by NNL. A further $239M is expected to be received from the sale of various assets.
The following is a summary of the various sales:
$1,070M CDMA and LTE
$908M ES and NGS
$616M Optical and Carrier
$214M LGN
$155M CVAS
$88M GSM
$18M Layer 4-7
$10M Packet
$4M other.
Tuesday, August 31, 2010
Monday, August 30, 2010
Canadian Silver Fox Alliance
The Silver Fox Alliance is circulating a petition to the Canadian Government to pass laws protecting pensions in bankruptcy.
Here the press release I received.
Silver Fox Media Release. Aug. 23, 2010
Today, Silver Fox Alliance (SFA), an organization of seniors, pensioners and supporters committed to achieve Canadian justice-in-bankruptcy, launched its' website, Facebook page and on-line petition.
PLEASE GO TO THE PETITION SITE AND SIGN NOW:
www.thepetitionsite.com/2/pass-federal-bill-c-501-third-reading-by-sept-30/
OTHER SITES TO CHECK OUT:
www.silverfoxalliance.com
www.facebook.com/group.php?gid=108180069230266&ref=ts
Dedicated to all Canadian private sector pensioners under threat of employer bankruptcy, the immediate focus is on 20,000 Nortel Pensioners for whom justice will die on September 30. In their crisis they will lose as much as 36% of their pensions, followed by all their health and life insurance by Dec.31.
Please help expand our reach by signing the petition and forwarding it, with the links provided, to your family, friends, neighbours and fellow pensioners.
Here the press release I received.
Silver Fox Media Release. Aug. 23, 2010
Today, Silver Fox Alliance (SFA), an organization of seniors, pensioners and supporters committed to achieve Canadian justice-in-bankruptcy, launched its' website, Facebook page and on-line petition.
PLEASE GO TO THE PETITION SITE AND SIGN NOW:
www.thepetitionsite.com/2/pass-federal-bill-c-501-third-reading-by-sept-30/
OTHER SITES TO CHECK OUT:
www.silverfoxalliance.com
www.facebook.com/group.php?gid=108180069230266&ref=ts
Dedicated to all Canadian private sector pensioners under threat of employer bankruptcy, the immediate focus is on 20,000 Nortel Pensioners for whom justice will die on September 30. In their crisis they will lose as much as 36% of their pensions, followed by all their health and life insurance by Dec.31.
Please help expand our reach by signing the petition and forwarding it, with the links provided, to your family, friends, neighbours and fellow pensioners.
Sunday, August 29, 2010
Canadian Pension Wind up versus FSM
Over the last week there has been a lot of discussion on the Yahoo Nortel Pension group about the pros and cons of winding up the pension, or using a private company (Financial Sponsorship Model) to continue the pension without wind up.
The NRPC has urged retirees to support the Financial Sponsorship Model (FSM) indicating that the payout percentage could be 8%-10% more. As pointed out by a number of people there is increased risk with the FSM versus the wind-up annuity approach.
In the case of the wind up with purchased annuity the payout ratio will be lower( NRPC has indicated around 64% if the pension is indexed), however there is a higher level of security since in Canada purchased annuities are insured against company failure by Assuris up to 85% or their value or $2000 per month which ever is higher.
In the case of the FSM approach the pension fund would not be wound up but would be managed by a private company. This means that the money in the fund would be invested in a variety of vehicles and managed by the operator. There is risk that the economy could once again impact the total value of the fund in the event of a turn down. On the other hand there would not be a cost associated with purchasing annuities, and there is also the possibility of gain in the value of the fund. Because the operator would expect to improve the value of the fund the pension payout would most likely be higher than through the annuity approach.
Unlike the situation of the Nortel guaranteed pension however, the private company managing the fund would not be obligated to make regular payments or top-ups into the fund as was the case when Nortel administered it. This could result in an eventual decline in the fund value if the investment gains do not meet the targets required, and could mean future reductions in pension payouts.
At this point there is no FSM option since the Ontario government has not yet agreed that this alternative is reasonable and legal. The only option on the table is the FSCO wind-up. The NRPC have been working with the Ontario Government to have them enact changes to the law to allow a FSM option.
In the event that Ontario agrees to do that, I think that there needs to be a vote by the retirees and those with deferred pensions in order to determine which choice to make. I don't think it is reasonable for the NRPC to make that decision on their own, since there appear to be a number of people who are uncertain as to the direction being advocated by the NRPC.
Before any option is chosen, there needs to be an information session at which the alternatives are clearly stated, along with the risks and rewards of each option. Independent views of each option should be presented by credible and respected financial analysts, so that the NRPC membership at large can have the data required to make an informed decision and choice.
Following the session, votes should be submitted by all retirees and future pensioners to the NRPC and the result verified by an independent agency to determine the direction forward.
The NRPC has urged retirees to support the Financial Sponsorship Model (FSM) indicating that the payout percentage could be 8%-10% more. As pointed out by a number of people there is increased risk with the FSM versus the wind-up annuity approach.
In the case of the wind up with purchased annuity the payout ratio will be lower( NRPC has indicated around 64% if the pension is indexed), however there is a higher level of security since in Canada purchased annuities are insured against company failure by Assuris up to 85% or their value or $2000 per month which ever is higher.
In the case of the FSM approach the pension fund would not be wound up but would be managed by a private company. This means that the money in the fund would be invested in a variety of vehicles and managed by the operator. There is risk that the economy could once again impact the total value of the fund in the event of a turn down. On the other hand there would not be a cost associated with purchasing annuities, and there is also the possibility of gain in the value of the fund. Because the operator would expect to improve the value of the fund the pension payout would most likely be higher than through the annuity approach.
Unlike the situation of the Nortel guaranteed pension however, the private company managing the fund would not be obligated to make regular payments or top-ups into the fund as was the case when Nortel administered it. This could result in an eventual decline in the fund value if the investment gains do not meet the targets required, and could mean future reductions in pension payouts.
At this point there is no FSM option since the Ontario government has not yet agreed that this alternative is reasonable and legal. The only option on the table is the FSCO wind-up. The NRPC have been working with the Ontario Government to have them enact changes to the law to allow a FSM option.
In the event that Ontario agrees to do that, I think that there needs to be a vote by the retirees and those with deferred pensions in order to determine which choice to make. I don't think it is reasonable for the NRPC to make that decision on their own, since there appear to be a number of people who are uncertain as to the direction being advocated by the NRPC.
Before any option is chosen, there needs to be an information session at which the alternatives are clearly stated, along with the risks and rewards of each option. Independent views of each option should be presented by credible and respected financial analysts, so that the NRPC membership at large can have the data required to make an informed decision and choice.
Following the session, votes should be submitted by all retirees and future pensioners to the NRPC and the result verified by an independent agency to determine the direction forward.
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