Retirees from are fed up with what’s happening at the troubled telecommunications equipment-maker, and they want a law firm to represent their interests during bankruptcy proceedings.
Concerned about the impact of Nortel’s financial woes on their retirement benefits, the (NNRA) is asking 1,000 of its members to pay $250 each as a $250,000 retainer for Miller & Martin, a firm with offices in Atlanta and in Nashville and Chattanooga, Tenn. The recently established Nortel Retirees Protection Committee is leading the effort.
Jerry Aiken, a Triangle resident and a 27-year Nortel veteran who retired in 2003, said the group was alarmed by the company’s termination of severance benefits to recently laid-off workers. Courts in the U.S. and Canada, where Nortel is based, permitted Nortel to stop severance pay and benefits after the company filed for bankruptcy in January.
“The simple answer is, ‘Yes, anyone would be upset with what is happening,’” Aiken told WRAL.com and Local Tech Wire when asked if he was angry.
“The impact potentially ranges from losing health care, some or all of your retirement, and if you are recently laid off, any severance to help with a transition to new employment,” he added.
In its appeal for support, the protection committee declared: “Having a large number of participants focused on the court proceedings through a single committee such as the NRPC along with a single legal counsel will have a powerful impact and will increase our chances of being treated properly during the legal negotiations that take place. …”
The retirees and former workers are seeking to protect qualified pension, non-qualified pension, deferred compensation, former employee severance, health care, long-term care, life insurance and other benefits.
“There are many retirees and recently severed employees that are impacted by the Nortel bankruptcy filing,” Aiken said. “Getting the word out is our biggest challenge. When former employees review the plan, I believe we will get sufficient support to retain counsel.”
Nortel still employs some 2,000 people in the Triangle and some 30,000 worldwide. However, a 10 percent work force reduction is part of Nortel’s current restructuring plans. Some of the laid-off workers losing severance benefits live in the RTP area.
To spread the word about their efforts, the NNRA is using its Web site, where it has posted information about the retainer and other bankruptcy updates.
Aiken , who said he is speaking only for himself and not other Nortel employees or the NNRA, is perplexed by what company management is doing as part of the bankruptcy reorganization.
For example, Nortel is asking the courts for permission to pay selected managers and employees up to $45 million in retention bonuses while laying off other workers and terminating severance.
“[W]hat is more concerning is the current request by Nortel senior management for the court to approve millions of dollars as retention bonuses for senior management and other selected remaining employees,” Aiken said. “This leadership team is a major factor for the mess that NT is in, and now they want retention bonuses to ensure key players don’t leave?
“They are out of their mind,” he added. “[A]ll would probably have been better off if most left long ago, and secondarily, in this economic climate, who is looking to hire [telecommunications] resources that just took their company into bankruptcy? Hopefully, the courts will not approve this request!”
Aiken, who worked in a variety of roles for Nortel around the U.S., said he and other retirees are “saddened” by what they see happening at the company.
“Nortel has been a great company for many years,” he explained. “[I]t saddens myself and most all former and current employees for the company to be in this condition.
“Employees are the main ingredient that made Nortel successful over the years, and it is troubling to now see ex-employees/retirees impacted financially. The impact varies for the many former employees, negatives ranging from recently laid off employees not receiving severance pay, deferred compensation (money contributed by employees from their normal paycheck) being stopped, non-qualified pension checks have stopped, and many questions still exist regarding medical benefits, life insurance and qualified pension payouts.”
While Nortel may be within its legal rights to take these steps, Aiken said, people are suffering as a result.
“Companies always reserve the right to make changes to … compensation, benefit, and retirement policies,” he acknowledged. “However, when decisions are made based on a set of expectations and in some cases a signed contract that are suddenly not fulfilled by one party, people’s lives are impacted!”
The NNRA believes that retaining legal counsel will give them a voice as the bankruptcy courts determines how Nortel’s debts and obligations should be resolved.
“The objective is to obtain recognition by the court so as to have a seat at the table for the proceedings,” he said. “The larger the number of employees that are being represented, the better the chances to receive court recognition so as to have some voice in the proceedings.”