NRPC Disappointed with Judge’s Decision

By Mark Evans | Published: March 29, 2010

Not surprisingly, Nortel Retirees and Former Employees Protection Canada is disappointed with an Ontario judge’s decision to approve a settlement agreement between Nortel and representatives of its retirees, terminated and long-term disabled employees that would have provided retirees and people on long-term disability with “significant concession”, including a “stay of execution” until later in the year for Nortel’s former workers.

Without the agreement all medical and dental coverage will stop on Wednesday, and Nortel’s pension plans could be summarily wound-up. Terminated employees who received no severance will lose a one-time payment of $3,000.

In a press release, the NRPC said:

“Judge Geoffrey Morawetz ruled in favour of Nortel’s junk bondholders, who had claimed in court that a clause in the proposed Agreement was unfair to their interests. The clause preserved the right of Nortel’s former workers to claim preferred status if Canada’s bankruptcy laws were to be amended prior to Nortel’s final liquidation.

“NRPC has long been asking for the federal government to give preferred status to employee-related claims in bankruptcy courts. This would place Nortel’s former workers above junk bondholders and foreign governments who represent the largest claims against Nortel’s assets. The change would also bring Canada into line with most other developed countries.”

NRPC is also asking the government of Ontario to establish a Pension Agency, in line with the recommendations of the 2008 Ontario Expert Commission on Pensions. The Agency would take over and run abandoned pension plans instead of using the remaining assets to buy annuities for retirees. The Nortel pension fund is significantly underfinanced and winding-up the plan would further reduce pensioners’ incomes.”

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  • protospherical1

    There are “extraordinary” circumstances here too, and from a judge who specializes in this sorta stuff… shame on him. Where are the plaintiff's arguments.

    I have heard the argument we must protect foreign investment… sure..
    HOWEVER, the deals made for these bonds in application circumvented listing pensions (the largest pension shortfall in Canada) than as a mere footnote (and a loophole closed immediately thereafter)… Where is the justice here?!

    I have also heard bonds were to pay employees longer (as another argument) but more to pay management bonuses..then and even after bankruptcy! Before severances, and again where; is the justice here, hiding behind the same lame laws that are in dire straights of repair, like their internal controls were for half a decade!

    Big business fiascos and figure heads, in favor of banks and junk bondholders over employees they ripped off to transfer and sell these peons after what they politely called irregularities in the largest accounting fraud settlement in Canada …extended repair of internal controls still in disarray for years right into bankruptcy and forever now.

    Sheeple led to slaughter yet again as others decide what is in everyone's best interests without everyone's input

    From HST after GST that killed FST,. to utlimatum settlements, ex Liberal finance minister (enough adgates and airbus gates and Nortels with bells on or reiterating their kids educations templates BS) having board members law firms defending CEO charged with fraud…

    like how endless and obvious does it have to get before attention is paid to the formal protests that fall on deaf or bias ears!

    Disgusting, keep ruining the little guys' lives because it is the big guys who call the shots! While no one wants a socialist government and even if they did look what arrogant Rae did legalizing Casinos without public consent before he turncoat, as bad as mean spirited Harris that just drains more from the people for their mismanagement. Who gains and who suffered during a jobless recovery and bank/gov't surplus as people ran record debt.

    A Robbin Hood government may finally be in order should anyone brave it. Starting with the OSC and cleaning house with all the hard to finds there too! More money for the RCMP and less for government employees drinks, dinners, to patronize pals or those that grease their palms ..all as legally as Manley defending Dunn or Z-Man calling buying opportunities as the OSC fined them nothing… all legal as ultimatum fraud settlement. Is something illegal is in order now!

  • Casual_Observer

    test

  • TongueInCheek

    The main question I have is: Are all creditor groups recognized as being equal therefore sharing estate proceeds on an equal basis?

    I sure hope that the Bondholders do not get first rights to the estate with other creditors getting the leftovers after Bondholders get their payments.

  • freqmgr

    I suspect they are not equal. NT, for one, has never said anyone (maybe other than bond holders) will recieive anything. Of course if NT doesn't shut down…who gets anything?

  • wasthere

    ''At present, virtually all Nortel creditors including bondholders, suppliers, pensioners, former employees and others are unsecured creditors with an equal claim to whatever assets are left when the Nortel assets are finally distributed.''

    'Ottawa Citizen march 28

  • less

    Nortel Refuses to Pay da 'Capped

  • longgone

    “A Robbin Hood government may finally be in order should anyone brave it.”

    just don't take any ideas from the States' “change” idiots……

  • protosphere

    Exactly. This is why Diane Urquhart was fighting for pension reform laws. These creditors get paid first, and even they will not be getting paid in full.

    Nortel's application for bondholders money promised over 10% interest (should have raised red flags right there) while paying themselves bonuses for financial innovation.

    I not sure exactly how it works but there will be little left if anything for unsecured creditors I would imagine and suppliers like Flex have already adjusted their agreements to ensure they get paid as they wind down , albeit so little is said to this end. as usual by NoTell.

    Then there are legal fees, and proverbial bonuses of course that buried them to begin with, and so much more before they eye the 3 or 4 billion that must pay the 7 or more billion… it is a mess…

    Nortel screwed up but bad at this level of macro-mismanagement on steroids while they reward stupidity and lies while using every loophole they can. These geniuses even totally killed their cash cow than keep operating without a profit for many more years to come. Huawei, Cisco, Noika do not have these mega headaches and they will be around …and I'd add Ericsson too but anything Nortel touches sours, like Avaya in the not too distant future. =)

  • wasthere

    That was bound to happen also.

    http://www.cbc.ca/canada/story/2010/03/30/norte…

    In this society, if you are a big lobby or a big group with lawyers, you can get decision go your way even if unfair to others. So I guess tomorrow, the judge will ok the deal so Nortel pensioners can still get 100% of their pension until the end of the year while the pool is only funded`at 70 %. Terribly unfair for all ex-Nortel employees who still have their money in the same pool but not retired yet. This pool should have been unwind Jan 14 2009 or pension reduced to reflect what was in the pension fund at that time. 2 years of sucking the fund will have been allowed , but fairness was never a priority here.

  • protosphere

    I like the idea of healthcare… I just hope it doesn't parallel Marxist socialism… it's expensive.

    Our envied Canadian health care is mismanaged and now subsidized by state run casinos that took the mob in a wild west town years to accomplish…our socialist NDP Bob Rae legalized it at a penstroke …need I elaborate on Manley's law firm defending Dunn, or our ex-attorney general's road rage, Mulrooney's airbus gate with bells on, etc…

    Ironically, health care works admirably in Cuba though =)

  • protosphere

    I like the idea of healthcare… I just hope it doesn't parallel Marxist socialism… it's expensive.

    Our envied Canadian health care is mismanaged and now subsidized by state run casinos that took the mob in a wild west town years to accomplish…our socialist NDP Bob Rae legalized it at a penstroke, need I elaborate on Manley or our ex-
    attourney general, M

    Ironically, it works admirably in Cuba =)

  • horace_grimswold

    …no. This bankruptcy process is like George Orwell's Animal Farm, where some creditors are more equal than other creditors…

  • norcan_pen

    An interesting viewpoint along with informed comments is a must read at this Blogger's site “Retirement Traps”

    It offers an explanation of why the court decision took so long and the desperate plight of the Nortel disabled employees.

    http://retire-secure.blogspot.com/2010/03/judge…

  • bankrupt_bob

    Wife just got letter from PBGC saying she has to repay three months overpayment from (PBGC takeover of NT) retirement plan. Not to worry, they say, as usually they only require 10% or less of the monthly amount until the debt has been repaid. No pension and now we owe PBGC for their mistake….. screwed again.

  • 4merEmployee22

    This Ontario Judge has no compassion and empathy towards ex-Nortel employees!

    He prefers to have a compassion and empathy to the poor top exec of the company

    who were entitled to millions of bonuses as by-product of bankruptcy.

    Lord! GOD? Where were you?
    FORGIVE THEM FOR THEY KNOW NOT WHAT THEY DO!!!

  • scalppeeler

    This is no surprise.
    Capitalism at its finest.
    Money and status talks. B.S walks.
    It talks in a democracy and it talks with communism.
    This is one constant that has been around since the romans
    were at their zenith of power.
    Ask tigger the buddha woods.
    Ask O.J Simpson.
    Ask Dunn or Mikey.
    Ask Canadian Members of Parliament.

  • Smithwick

    Media Release from Rights for Nortel Disabled Employees

    Saturday, April 3, 2010, 1:00 P.M.

    Words seem inadequate to express the sadness we feel about the passing of Alice Campbell on April 2, 2010 at 6:00 P.M.

    Alice Campbell is a fellow Nortel long term disabled employee, who spoke to CBC National News on November 26, 2009 about the injustice of Nortel not honouring her disability income and medical benefits.

    When Gillian Finlay of CBC asked Alice what she would say to Nortel's John Doolittle, she said:

    “Quit being so greedy. You know. There's a lot of us people in the world. They want to have the whole world for themselves. These people get so greedy. But, they're taking their share and our share. It's not right!”

    Watch CBC National News Video:

    Alice Campbell – Nortel LTD Employee Interviewed by Gillian Finley, CBC

    Alice started the journey with the group of 37 Nortel long term disabled employees, who oppose the Nortel settlement even though it pays for our medical costs for the next nine months, because this settlement forces us to live in poverty for the rest of our lives. Our group believes the effect of Justice Geoffrey Morawetz approving this settlement on March 31, 2010 is:

    (i) to deny us the right to sue parties responsible for an alleged Breach of Trust involving Nortel not making required employer contributions into the Health and Welfare Trust (HWT) for many years and the HWT loaning Nortel $37 million. This results in a total shortfall within the HWT of an estimated $112 million for payment of the LTD wage loss replacement income, medical, dental and life benefits; and

    (ii) to attempt to prevent a BIA amendment for preferred status of long term disability claims to be applicable to us.

    Peter Burns says: “In memory of Alice Campbell, our group will not give up the fight to have our long term disability benefits paid from the Nortel bankruptcy estate on a preferred basis. The missing money in the HWT is ours, not theirs, and we want it back now.”

    Our future is in the hands of the Ontario appeal court to overturn J. Morawetz's decision, that asks us to accept living in poverty for the rest of our lives.

    Josee Marin says: “We urge the Conservative Senators to join their Liberal colleagues in the vote for Senator Art Eggleton's Bill S-216, which gives preferred status for long term disability claims over other unsecured creditor groups. It is a question of human dignity to be able to get the benefits we paid for, it is what we need in order to survive.”

    “Our lives and our ability to live independently are in the hands of Industry Minister Tony Clement, Finance Minister James Flaherty and Parliamentary Secretary of Finance Ted Menzies, who are examining the matter and will report to Parliament shortly. Our group is not asking for “Special Rights” or government handouts. We simply wish our courts and our Federal Government to ensure fairness in bankruptcy proceedings, such that a Breach of Trust of the disabled is remedied in full to enforce the obligations of employers providing long term disability benefits,” says Arlene Borenstein.

    Nortel's Directors and governance committees for the HWT could have put the missing money back into the trust for the disabled prior to its bankruptcy filing, since the company had $1.8 billion of available cash world-wide at that time. The bankruptcy law amendment for Nortel's disabled would have incremental cost of less than 2% of the Nortel world-wide estate, which has projected cash of $6 billion for disbursement to world-wide creditors later this year or in 2011. While the Canada Estate has estimated cash of only $134 million at April 24, 2010, it will be getting a future share of the projected $4 billion cash in the lock box from Nortel's business sale proceeds.

    The disabled should not be forced into poverty when there are billions of dollars in bankruptcy estates and executives are being paid millions of dollars in bonuses. It is not a Special Right to have quality of life and peace of mind for the most vulnerable people in Canadian society.

  • scalppeeler

    This doesn't apply to refugee claimaints, canadians of convenience and people who never paid into the canadian system.
    Oh Canaduh.
    Good Luck but unfortunately you are just not a big enough, influential group unlike
    the groups I mentioned above who get these perks in exchange for votes, especially in mcguintys ontario. As for Alice you think there will be any kind of condolence letter or restitution from anybody besides her family and friends. Unfortunately not.

  • huffman

    What about retired employe's whose pension are paid as and annuity?
    What happens to their pension, health and dental benifits?

  • 4merEmployee22

    Excellent question!
    I wonder if the MONITOR will entertain such ligitimate question?

    You see my friend? NORTEL is no longer obligated to answer such simple
    question. It has to go through the MONITOR and they will go by the
    CCAA for loopholes where the money went?

  • 4merEmployee22

    Excellent question!
    I wonder if the MONITOR will entertain such ligitimate question?

    You see my friend? NORTEL is no longer obligated to answer such simple
    question. It has to go through the MONITOR and they will go by the
    CCAA for loopholes where the money went?

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