|
|
The NEW Avaya has now chosen to offer their company and "stock" on the market as the stock ticker name "AVYA"
click on this LINK or image above to see the NEW Avaya New York Stock Exchange listing.
You should seek financial advice before investing in this "new company or follow their ticker "AVYA" internet sources.
In the near future, I might try to explain and provide facts of what happened to the OLD Avaya and the new Avaya...
and how Omaha Works was a item of interest in this old company. Have to get to get the facts first...
and how Omaha Works was a item of interest in this old company. Have to get to get the facts first...
This section will remain as a reminder - NEVER assume anything and never trust anyone, especially your current or past employer
Get it in writing or by arm twisting?
Will leave this information here till ...Texas succeeds from the Union
HISTORY is below and behind us...
January, 22, 2019
To: Avaya Retirees Chapter Members of the NRLN
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Update of Salaried Supplemental Pension Settlement; PBGC Annual Report and Avaya News
Avaya Chapter News - Update of Salaried Supplemental Pension Settlement and PBGC Reports Improved Financial Condition
Thanks to Bob Emberger – Avaya Retiree posted an update below regarding the Bankruptcy settlement of our Salaried Supplemental Pension Plan
"Estimate of final distribution.”
On January 21, 2019, Avaya filed Debtor’s post confirmation settlement report (Docket 2284) . Based on the original settlement document (Docket
2192) and the quarterly report (above), We have enough information to deduce how much we might potentially get in a subsequent distribution.
Based on my previous post, there are $4,489,131 on claims yet to be finalized. At 19.8%, they would use $888,847.93 of the remaining pot if they were upheld in their entirety.
The pot currently has $1,776,799 left in it, so there is an excess of $887,951.
So if all of the remaining claims are upheld, the final distribution would be about 0.31% or $3.10 per $1,000 of approved claim value.
If none of the remaining claims are upheld, the final distribution would be 0.63% or $6.30 per $1,000 of approved claim value.
Based on the relatively small amount to be distributed, I would not expect any additional distribution until all claims are settled.
For those who are interested, I have recapped the remaining claims and my calculations below.
Best Wishes,
Bob Emberger
Remaining Claims
Claims with no progress (that I can detect) : $4,458,370.
There are 5 claims in this group – 2 by Spirent, and one each by SAE Power, Alan Wattenmaker, and the State Board of Equalization.
The biggest claim in this group is SAE Power which Judge Bernstein estimated at $3,252,182.
At one time, Avaya asked for this claim to be expunged.
Claims with the objection date extended to March 15: $30,761 There are two claims, both by the state of Tennessee
Calculations: Docket 2192
Approved claims : $254,431,883.05
Reserved claims : $ 33,501,218.38
Total claims : $287,933,101.43
Payout pot: $ 57,000,000.00
Payout % : 19.796%
Amount dispersed: $ 50,368,010
Amount held back: $ 6,631,990
Quarterly financial report for quarter ending 12/31/18
Total Pot: $ 57,000,000
Amount Dispersed: $55,223,201 (Note 1)
Amount Remaining: $1,776,799
Claims Remaining (per RME estimate): $ 4,489,131 Amount required to service remaining claims: $ 888,680 Excess currently in payout pot: $877,818.
Minimum additional payout: 0.31% = $877,818 / ($254,431,883.05 +
$24,577,823 + $4,489,131)
Maximum additional payout: 0.63% = $1,776,799 / ($254,431,883.05 +
$24,577,823)
Note 1: Implies $4,865,490 paid for claims settled after Docket 2192.
Those claims would be valued at $24,577,823"
Good news from PBGC regarding improved financial condition
PBGC Reports Improved Financial Condition WASHINGTON - The Pension Benefit Guaranty Corporation’s Fiscal Year 2018 Annual Report, shows improvement in the financial condition of the agency’s Single-Employer Insurance and Multiemployer Insurance Programs.
Our Avaya Salaried Pension Plan is in the Single-Employer Program which showed a positive net position of $2.4 billion as of September 30, 2018, emerging from a negative net position or “deficit” of $10.9 billion at the end of FY 2017 and continuing a trend of improving results.
The Multiemployer Program showed a deficit of $53.9 billion, reduced from $65.0 billion at the end of FY 2017. Despite this improvement, the Multiemployer Program unfortunately continues on the path toward insolvency, likely by the end of FY 2025.
The primary driver of the financial improvement in both programs was higher interest rate factors, which reduced the value of PBGC’s benefit liabilities. A strong economy and the absence of new large claims also contributed to the financial improvement.
“A financially strong pension insurance program that workers and employers can count on is a vital source of retirement security for millions of workers, retirees, and their families,” said PBGC Director Tom Reeder. “The continued improvement in the financial condition of the Single-Employer Insurance Program is a welcome result.
The Multiemployer Insurance Program deficit has narrowed, but it clearly won’t keep the program from running out of money. PBGC continues to work with Congress and the multiemployer plan community to preserve the solvency of multiemployer plans and the Multiemployer Program.”
In the coming years, absent legislative changes, more and larger claims on the Multiemployer Program will lead to the program’s insolvency. If the Multiemployer Program is allowed to become insolvent, PBGC will only be able to pay a small fraction of guaranteed benefits for participants in failed multiemployer plans.
PBGC’s two pension insurance programs – single-employer and multiemployer – are designed to protect participants’ pension benefits when plans fail. However, the programs differ significantly in the level of benefits guaranteed, the insurable event that triggers the guarantee, and the premiums paid by insured plans. By law, the two programs are operated and financed separately. Assets of one program may not be used to pay obligations of the other.
Single-Employer Program Records Positive Net Position of $2.4 Billion
The Single-Employer Program had assets of $109.9 billion and liabilities of $107.5 billion as of September 30, 2018. The positive net position of $2.4 billion reflects an improvement of $13.4 billion during FY 2018. The program’s improvement is consistent with PBGC’s recent projections and was accelerated by the continued strong economy, lower than expected claims, and higher interest rates.
In FY 2018, the agency paid $5.8 billion in benefits to more than 861,000 retirees, about the same as last year. During the year, the agency became responsible for 58 single-employer plans that terminated without enough money to provide all promised benefits. These plans cover 28,000 current and future retirees.
PBGC works collaboratively with plan sponsors to negotiate agreements that protect pensions and premium payers. PBGC protected the pension benefits of about 52,000 people by working with eight companies to maintain their pension plans as the companies emerged from bankruptcy. Additionally, through the Early Warning Program, the agency negotiated over $550 million in financial protection, for about 100,000 people in plans put at risk by certain corporate events and transactions.
Multiemployer Program Deficit Narrows to $53.9 Billion but Remains Headed to Insolvency
The Multiemployer Program had liabilities of $56.2 billion and assets of $2.3 billion as of September 30, 2018. This resulted in a deficit of $53.9 billion, down from $65.1 billion last year. The $11 billion decrease in the deficit stems mostly from higher interest rate factors used to measure the value of PBGC’s future payments to insolvent plans.
During FY 2018, the agency provided $153 million in financial assistance to 81 insolvent multiemployer plans, up from the previous year’s payments of $141 million to 72 plans. In the coming years, the demand for financial assistance from PBGC will increase rapidly as more and larger multiemployer plans run out of money and need help to provide benefits at the guarantee levels set by law. Absent a change in law, the assets and future income of PBGC’s Multiemployer Program are only a small fraction of the amounts PBGC will need to support the guaranteed benefits of participants in plans that are currently insolvent as well as those expected to become insolvent during the next decade.
About PBGC’s FY 2018 Financial Report
PBGC’s financial statements are prepared in accordance with generally accepted accounting principles in the U.S. For FY 2018, PBGC received an unmodified audit opinion on its financial statements as well as an unmodified audit opinion on internal control over financial reporting. CliftonLarsonAllen LLP performed the audit under contract with PBGC’s Office of Inspector General, which oversaw the audit. Separately, PBGC publishes a Projections Report each year that illustrates the possible future financial condition of the agency’s two insurance programs.
About PBGC: Important!
PBGC protects the pension benefits of nearly 37 million Americans in private-sector pension plans. The agency operates two separate insurance programs — one covering pension plans sponsored by a single-employer (ours Avaya was a single employer pension plan) and another covering multiemployer pension plans, which are sponsored by more than one employer and maintained under collective bargaining agreements. Teamsters, Construction Trades, etc. PBGC is currently responsible for the benefits of about 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income, and, for the Single-Employer Program, assets and recoveries from failed single-employer plans. For more information, visit PBGC.gov.
— ### --
Vern Larson, President,
NRLN Avaya Retirees Chapter
Phone 402-203-6899 Email vernlarson@cox.net
Avaya: On-Premise To Cloud Transition Can help the company drive new customers along with NG911 Location Reporting Solution.
Avaya Introduces Enterprise Public Safety Breakthrough: First Integrated Next Generation 911 Location Reporting Solution for Emergency Response
01-22-2019
AUSTIN, Texas--(BUSINESS WIRE)-- Avaya ENGAGE® 2019 – Avaya Holdings Corp. (NYSE: AVYA) today announced unprecedented, life-saving device location reporting capabilities that are now available as part of Avaya communications solutions for emergency response management, providing real-time information that can help make the difference in life or death situations.
Avaya communications solutions are the first to provide location discovery for devices and place that data into a national Next Generation 911 (NG911) repository, making that information readily available to first-responders, helping enable them to more accurately locate the position of the caller’s device as well as access additional critical information when calls are made from an Avaya communications system. This unique integration allows Avaya solutions to directly provide public-safety answering points (PSAP) with accurate, real-time location, floor-plans and other critical information that could help save lives.
“In situations where every second counts, seamless communication and the sharing of high-fidelity data can make the difference between life and death,” said Mark J. Fletcher, ENP and Chief Architect for Worldwide Public Safety Solutions, Avaya. “Everyone across the continuum of care needs real-time access to information and to each other to make certain each individual in distress receives optimal care. As the company that provides innovative ways for people to work and communicate from anywhere on any device, we are able to deliver a solution with these advanced emergency calling capabilities to help ensure their safety wherever and however they are connected.”
Across the country, 911 dispatchers in more than 6,100 emergency contact centers or PSAPs are working with underlying technology that was created in the landline era and optimized for people calling 911 from traditional landlines, thus creating a significant communication gap for today’s emergency response personnel.
“Proper routing of 911 calls, and providing accurate caller location to emergency services operators are the fundamental components of a successful enterprise 911 strategy,” said Irwin Lazar, Vice President and Service Director at Nemertes Research. “With soft client adoption increasing by 30 percent, and mobile UC clients by 34 percent, by the end of 2019, Avaya’s solution addresses a growing market need to ensure accurate location identification of 911 callers from any device.”
Avaya communications solutions deployed with SENTRY™ NG911 are available today for organizations of all sizes direct from Avaya or through Avaya Business Partners, utilizing the new capabilities recently added to the U.S. Emergency Network. Avaya solutions are the first to place user-specific location information from a commercial network in an additional data repository. Using this additional data repository, public safety agencies are able to retrieve additional data and use the information to enhance the response to an emergency incident. Primarily, this allows the addition of high-fidelity location information, in real time, that existing carrier databases are not capable of providing.
When a 911 call is received by a 911 PSAP the emergency response systems query the repository for additional information such as precise location information, that they otherwise wouldn’t have.
Avaya enterprise emergency solutions also include the Avaya Cloud Notification System, which enables fast, automated notifications via voice, text or various combinations to large groups of people who need to be alerted with the accurate information that is relevant during an emergency event. Using integrated active databases, alerts can be sent to parents, community members or other registered emergency contacts, providing instructions or other important information that is critical in times of need.
To: Avaya Retirees Chapter Members of the NRLN
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Update of Salaried Supplemental Pension Settlement; PBGC Annual Report and Avaya News
Avaya Chapter News - Update of Salaried Supplemental Pension Settlement and PBGC Reports Improved Financial Condition
Thanks to Bob Emberger – Avaya Retiree posted an update below regarding the Bankruptcy settlement of our Salaried Supplemental Pension Plan
"Estimate of final distribution.”
On January 21, 2019, Avaya filed Debtor’s post confirmation settlement report (Docket 2284) . Based on the original settlement document (Docket
2192) and the quarterly report (above), We have enough information to deduce how much we might potentially get in a subsequent distribution.
Based on my previous post, there are $4,489,131 on claims yet to be finalized. At 19.8%, they would use $888,847.93 of the remaining pot if they were upheld in their entirety.
The pot currently has $1,776,799 left in it, so there is an excess of $887,951.
So if all of the remaining claims are upheld, the final distribution would be about 0.31% or $3.10 per $1,000 of approved claim value.
If none of the remaining claims are upheld, the final distribution would be 0.63% or $6.30 per $1,000 of approved claim value.
Based on the relatively small amount to be distributed, I would not expect any additional distribution until all claims are settled.
For those who are interested, I have recapped the remaining claims and my calculations below.
Best Wishes,
Bob Emberger
Remaining Claims
Claims with no progress (that I can detect) : $4,458,370.
There are 5 claims in this group – 2 by Spirent, and one each by SAE Power, Alan Wattenmaker, and the State Board of Equalization.
The biggest claim in this group is SAE Power which Judge Bernstein estimated at $3,252,182.
At one time, Avaya asked for this claim to be expunged.
Claims with the objection date extended to March 15: $30,761 There are two claims, both by the state of Tennessee
Calculations: Docket 2192
Approved claims : $254,431,883.05
Reserved claims : $ 33,501,218.38
Total claims : $287,933,101.43
Payout pot: $ 57,000,000.00
Payout % : 19.796%
Amount dispersed: $ 50,368,010
Amount held back: $ 6,631,990
Quarterly financial report for quarter ending 12/31/18
Total Pot: $ 57,000,000
Amount Dispersed: $55,223,201 (Note 1)
Amount Remaining: $1,776,799
Claims Remaining (per RME estimate): $ 4,489,131 Amount required to service remaining claims: $ 888,680 Excess currently in payout pot: $877,818.
Minimum additional payout: 0.31% = $877,818 / ($254,431,883.05 +
$24,577,823 + $4,489,131)
Maximum additional payout: 0.63% = $1,776,799 / ($254,431,883.05 +
$24,577,823)
Note 1: Implies $4,865,490 paid for claims settled after Docket 2192.
Those claims would be valued at $24,577,823"
Good news from PBGC regarding improved financial condition
PBGC Reports Improved Financial Condition WASHINGTON - The Pension Benefit Guaranty Corporation’s Fiscal Year 2018 Annual Report, shows improvement in the financial condition of the agency’s Single-Employer Insurance and Multiemployer Insurance Programs.
Our Avaya Salaried Pension Plan is in the Single-Employer Program which showed a positive net position of $2.4 billion as of September 30, 2018, emerging from a negative net position or “deficit” of $10.9 billion at the end of FY 2017 and continuing a trend of improving results.
The Multiemployer Program showed a deficit of $53.9 billion, reduced from $65.0 billion at the end of FY 2017. Despite this improvement, the Multiemployer Program unfortunately continues on the path toward insolvency, likely by the end of FY 2025.
The primary driver of the financial improvement in both programs was higher interest rate factors, which reduced the value of PBGC’s benefit liabilities. A strong economy and the absence of new large claims also contributed to the financial improvement.
“A financially strong pension insurance program that workers and employers can count on is a vital source of retirement security for millions of workers, retirees, and their families,” said PBGC Director Tom Reeder. “The continued improvement in the financial condition of the Single-Employer Insurance Program is a welcome result.
The Multiemployer Insurance Program deficit has narrowed, but it clearly won’t keep the program from running out of money. PBGC continues to work with Congress and the multiemployer plan community to preserve the solvency of multiemployer plans and the Multiemployer Program.”
In the coming years, absent legislative changes, more and larger claims on the Multiemployer Program will lead to the program’s insolvency. If the Multiemployer Program is allowed to become insolvent, PBGC will only be able to pay a small fraction of guaranteed benefits for participants in failed multiemployer plans.
PBGC’s two pension insurance programs – single-employer and multiemployer – are designed to protect participants’ pension benefits when plans fail. However, the programs differ significantly in the level of benefits guaranteed, the insurable event that triggers the guarantee, and the premiums paid by insured plans. By law, the two programs are operated and financed separately. Assets of one program may not be used to pay obligations of the other.
Single-Employer Program Records Positive Net Position of $2.4 Billion
The Single-Employer Program had assets of $109.9 billion and liabilities of $107.5 billion as of September 30, 2018. The positive net position of $2.4 billion reflects an improvement of $13.4 billion during FY 2018. The program’s improvement is consistent with PBGC’s recent projections and was accelerated by the continued strong economy, lower than expected claims, and higher interest rates.
In FY 2018, the agency paid $5.8 billion in benefits to more than 861,000 retirees, about the same as last year. During the year, the agency became responsible for 58 single-employer plans that terminated without enough money to provide all promised benefits. These plans cover 28,000 current and future retirees.
PBGC works collaboratively with plan sponsors to negotiate agreements that protect pensions and premium payers. PBGC protected the pension benefits of about 52,000 people by working with eight companies to maintain their pension plans as the companies emerged from bankruptcy. Additionally, through the Early Warning Program, the agency negotiated over $550 million in financial protection, for about 100,000 people in plans put at risk by certain corporate events and transactions.
Multiemployer Program Deficit Narrows to $53.9 Billion but Remains Headed to Insolvency
The Multiemployer Program had liabilities of $56.2 billion and assets of $2.3 billion as of September 30, 2018. This resulted in a deficit of $53.9 billion, down from $65.1 billion last year. The $11 billion decrease in the deficit stems mostly from higher interest rate factors used to measure the value of PBGC’s future payments to insolvent plans.
During FY 2018, the agency provided $153 million in financial assistance to 81 insolvent multiemployer plans, up from the previous year’s payments of $141 million to 72 plans. In the coming years, the demand for financial assistance from PBGC will increase rapidly as more and larger multiemployer plans run out of money and need help to provide benefits at the guarantee levels set by law. Absent a change in law, the assets and future income of PBGC’s Multiemployer Program are only a small fraction of the amounts PBGC will need to support the guaranteed benefits of participants in plans that are currently insolvent as well as those expected to become insolvent during the next decade.
About PBGC’s FY 2018 Financial Report
PBGC’s financial statements are prepared in accordance with generally accepted accounting principles in the U.S. For FY 2018, PBGC received an unmodified audit opinion on its financial statements as well as an unmodified audit opinion on internal control over financial reporting. CliftonLarsonAllen LLP performed the audit under contract with PBGC’s Office of Inspector General, which oversaw the audit. Separately, PBGC publishes a Projections Report each year that illustrates the possible future financial condition of the agency’s two insurance programs.
About PBGC: Important!
PBGC protects the pension benefits of nearly 37 million Americans in private-sector pension plans. The agency operates two separate insurance programs — one covering pension plans sponsored by a single-employer (ours Avaya was a single employer pension plan) and another covering multiemployer pension plans, which are sponsored by more than one employer and maintained under collective bargaining agreements. Teamsters, Construction Trades, etc. PBGC is currently responsible for the benefits of about 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income, and, for the Single-Employer Program, assets and recoveries from failed single-employer plans. For more information, visit PBGC.gov.
— ### --
Vern Larson, President,
NRLN Avaya Retirees Chapter
Phone 402-203-6899 Email vernlarson@cox.net
Avaya: On-Premise To Cloud Transition Can help the company drive new customers along with NG911 Location Reporting Solution.
Avaya Introduces Enterprise Public Safety Breakthrough: First Integrated Next Generation 911 Location Reporting Solution for Emergency Response
01-22-2019
AUSTIN, Texas--(BUSINESS WIRE)-- Avaya ENGAGE® 2019 – Avaya Holdings Corp. (NYSE: AVYA) today announced unprecedented, life-saving device location reporting capabilities that are now available as part of Avaya communications solutions for emergency response management, providing real-time information that can help make the difference in life or death situations.
Avaya communications solutions are the first to provide location discovery for devices and place that data into a national Next Generation 911 (NG911) repository, making that information readily available to first-responders, helping enable them to more accurately locate the position of the caller’s device as well as access additional critical information when calls are made from an Avaya communications system. This unique integration allows Avaya solutions to directly provide public-safety answering points (PSAP) with accurate, real-time location, floor-plans and other critical information that could help save lives.
“In situations where every second counts, seamless communication and the sharing of high-fidelity data can make the difference between life and death,” said Mark J. Fletcher, ENP and Chief Architect for Worldwide Public Safety Solutions, Avaya. “Everyone across the continuum of care needs real-time access to information and to each other to make certain each individual in distress receives optimal care. As the company that provides innovative ways for people to work and communicate from anywhere on any device, we are able to deliver a solution with these advanced emergency calling capabilities to help ensure their safety wherever and however they are connected.”
Across the country, 911 dispatchers in more than 6,100 emergency contact centers or PSAPs are working with underlying technology that was created in the landline era and optimized for people calling 911 from traditional landlines, thus creating a significant communication gap for today’s emergency response personnel.
“Proper routing of 911 calls, and providing accurate caller location to emergency services operators are the fundamental components of a successful enterprise 911 strategy,” said Irwin Lazar, Vice President and Service Director at Nemertes Research. “With soft client adoption increasing by 30 percent, and mobile UC clients by 34 percent, by the end of 2019, Avaya’s solution addresses a growing market need to ensure accurate location identification of 911 callers from any device.”
Avaya communications solutions deployed with SENTRY™ NG911 are available today for organizations of all sizes direct from Avaya or through Avaya Business Partners, utilizing the new capabilities recently added to the U.S. Emergency Network. Avaya solutions are the first to place user-specific location information from a commercial network in an additional data repository. Using this additional data repository, public safety agencies are able to retrieve additional data and use the information to enhance the response to an emergency incident. Primarily, this allows the addition of high-fidelity location information, in real time, that existing carrier databases are not capable of providing.
When a 911 call is received by a 911 PSAP the emergency response systems query the repository for additional information such as precise location information, that they otherwise wouldn’t have.
Avaya enterprise emergency solutions also include the Avaya Cloud Notification System, which enables fast, automated notifications via voice, text or various combinations to large groups of people who need to be alerted with the accurate information that is relevant during an emergency event. Using integrated active databases, alerts can be sent to parents, community members or other registered emergency contacts, providing instructions or other important information that is critical in times of need.
January, 11, 2019
To: Avaya Retirees Chapter Members of the NRLN
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Avaya Financial Results, Supplemental Pension & Bankruptcy Court Payments
Will the new reorganized Avaya survive or should I say “how long can they survive?”
We reviewed the recent Avaya results. Fourth quarter generated $11 million in profit from operations, better, but when interest was applied they lost money. Again…
Interest on the debt was $57 million. Better than the annual $420 million plus interest pre-bankruptcy. Long term debt is $3 billion plus and total liabilities are $5.6 billion. ($8.6 billion)
The positive side Avaya generated $202 million in cash, $57 million from operations, doubling their cash position. Yes, it was a turn around. The first operating profit in a number of years.
Our thinking is they need to grow the business significantly to have any opportunity to service the continuing debt load. First quarter of 2019 has a $29 million loan payment with, we assume, another $50 plus million in interest.
So, let them celebrate the turn around and all of us pray that they continue to grow the business so they can service the debt from current operations. Avaya needs to continue to gain market share and target new Contact Cloud Center customers. So far the Avaya Represented (Union) Sponsored Pension Plan and benefits are still being covered.
To all AVAYA Salaried Management Pension members that were receiving a Supplemental Pension:
If anyone that had been receiving a Supplemental Pension and has not yet received their initial Bankruptcy Settlement Check, it could be because of an incorrect address on file. If you have not received your check contact PrimeClerk at https://cases.primeclerk.com/avaya/Home-Index.
I just had another person that was able to get their check re-issued because of a bad mailing address. Over two months before knowing that a payment had been made.
Received this update from Bob Emberger, Avaya Retiree
Regarding the possible payments that may be available to us from the Bankruptcy Court this year on our settlement on Supplemental Pensions.
When Avaya made its first distribution for our supplemental pensions, it reserved enough money to pay an additional $33.5 million in claims (at the same rate that we were paid). (Docket 2194).
To the extent that any money was left over after those claims were paid, we would all share proportionately in any funds that were left over.
If all of the $33.5 million were disallowed, we would get an additional 2.6% distribution beyond the 19.8% we already received.
Clearly, not all of the claims will be thrown out, but we should get a little bit more this year. Based on the filings made so far, here is the status of the $33.5 as of January 9, 2019.
Claims with no progress (that I can detect): $4,458,370.
There are 5 claims in this group – 2 by Spirent, and one each by SAE Power, Alan Wattenmaker, and the State Board of Equalization. The biggest claim in this group is SAE Power which Judge Bernstein estimated at $3,252,182. At one time, Avaya asked for this claim to be expunged.
Claims with the objection date extended to March 15: $30,761. There are two claims, both by the state of Tennessee
Claims settled for an unspecified amount: $28,619,200.
Four (4) claims have been settled confidentially. (Straight Path, AT&T Services, Charter, and Angela Adams DeCarlo) To the extent that these claims were settled for less than the full amount, there may be some money left in the pot. When Avaya files its next quarterly report to the court, we may be able to deduce the amount paid in total, but not the individual settlements.
Claims settled for the scheduled amount: $25,647.
Two claims were settled for the amount assumed in Docket 2194. (Frontier Communications and Michael Carson). There is no leftover money from this group to distribute.
Claims settled for $0.
Four (4) claims were settled with no payment. (Polycom, City of Albany, County of San Diego, Jon Shaw). These claims were reserved at $367,242.
Funds from these claims will be distributed proportionately when Avaya makes its next distribution.
I intend to keep tracking the status of these until they are all resolved.
Bob Emberger
Bob asked me to post this on our website. I would like to thank Bob for his diligence on keeping us informed regarding these payments. He has been working this hard since before his case in Bankruptcy court.
Also, I want to remind you if you did not make your 2018 contribution to our NRLN Chapter you should have received a postcard from the NLRN in last couple of weeks asking for your annual contribution. Below is the form to mail with your contribution and thank you for your continued support.
The NRLN continues to advocate for legislation to protect Social Security, Medicare and reduce the cost of prescription drugs. January 3, 2019 marked the beginning of the 116th Congress with Democrats controlling the U.S. House of Representatives and Republicans controlling the U.S. Senate. All of the bills that the NRLN lobbied for in 2017 and 2018 that were not passed died at the end of the 115th Congress on December 31, 2018. The NRLN is lobbying for the reintroduction and passage of many of those bills.
Please become an individual contributor to the NRLN Avaya Retirees Chapter or renew your membership by making a contribution of $10, $25, $50, $75 or more. Any amount you can contribute will help and be appreciated. You may make your check or money order payable to NRLN, Inc. and mail it with the Contribution Form below in the enclosed envelope. Or, make your contribution with your credit card on the secure NRLN website at www.nrln.org. Click on the red flashing icon “Contribute to the NRLN” and select the credit card option. If you have already made your 2018 contribution, thank you.
----------------------------------------------------------------------------------------------
NRLN INDIVIDUAL CONTRIBUTION FORM Avaya Retirees Chapter
The NRLN is a nonprofit, tax-exempt organization. Contributions are not tax deductible.
Name__________________________________ Age __under 55; __ 55-64; __ 65 or over
Address________________________City_____________State___Zip_____Zip + 4 ____
Phone___________________ Email Address (if available)____________________________
Mail your check or money order of $25, $50, $75 or more (any amount is appreciated) to:
NRLN Inc, PO Box 69051, Baltimore, MD 21264-9051. Or, make a contribution with your
credit card at www.nrln.org. Click on the red flashing icon “Contribute to the NRLN”.
Vern Larson, President,
NRLN Avaya Retirees Chapter
Phone 402-203-6899 Email vernlarson@cox.net
If you know any other Avaya Retirees who are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions please send them the link below and ask them to join the NRLN Avaya Retirees Chapter. All those who have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter at:
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Our Avaya Retirees Chapter NRLN site - http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html - the NRLN home page is http://www.nrln.org/
Unsubscribe | Email Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: Avaya Retirees Chapter Members of the NRLN
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Avaya Financial Results, Supplemental Pension & Bankruptcy Court Payments
Will the new reorganized Avaya survive or should I say “how long can they survive?”
We reviewed the recent Avaya results. Fourth quarter generated $11 million in profit from operations, better, but when interest was applied they lost money. Again…
Interest on the debt was $57 million. Better than the annual $420 million plus interest pre-bankruptcy. Long term debt is $3 billion plus and total liabilities are $5.6 billion. ($8.6 billion)
The positive side Avaya generated $202 million in cash, $57 million from operations, doubling their cash position. Yes, it was a turn around. The first operating profit in a number of years.
Our thinking is they need to grow the business significantly to have any opportunity to service the continuing debt load. First quarter of 2019 has a $29 million loan payment with, we assume, another $50 plus million in interest.
So, let them celebrate the turn around and all of us pray that they continue to grow the business so they can service the debt from current operations. Avaya needs to continue to gain market share and target new Contact Cloud Center customers. So far the Avaya Represented (Union) Sponsored Pension Plan and benefits are still being covered.
To all AVAYA Salaried Management Pension members that were receiving a Supplemental Pension:
If anyone that had been receiving a Supplemental Pension and has not yet received their initial Bankruptcy Settlement Check, it could be because of an incorrect address on file. If you have not received your check contact PrimeClerk at https://cases.primeclerk.com/avaya/Home-Index.
I just had another person that was able to get their check re-issued because of a bad mailing address. Over two months before knowing that a payment had been made.
Received this update from Bob Emberger, Avaya Retiree
Regarding the possible payments that may be available to us from the Bankruptcy Court this year on our settlement on Supplemental Pensions.
When Avaya made its first distribution for our supplemental pensions, it reserved enough money to pay an additional $33.5 million in claims (at the same rate that we were paid). (Docket 2194).
To the extent that any money was left over after those claims were paid, we would all share proportionately in any funds that were left over.
If all of the $33.5 million were disallowed, we would get an additional 2.6% distribution beyond the 19.8% we already received.
Clearly, not all of the claims will be thrown out, but we should get a little bit more this year. Based on the filings made so far, here is the status of the $33.5 as of January 9, 2019.
Claims with no progress (that I can detect): $4,458,370.
There are 5 claims in this group – 2 by Spirent, and one each by SAE Power, Alan Wattenmaker, and the State Board of Equalization. The biggest claim in this group is SAE Power which Judge Bernstein estimated at $3,252,182. At one time, Avaya asked for this claim to be expunged.
Claims with the objection date extended to March 15: $30,761. There are two claims, both by the state of Tennessee
Claims settled for an unspecified amount: $28,619,200.
Four (4) claims have been settled confidentially. (Straight Path, AT&T Services, Charter, and Angela Adams DeCarlo) To the extent that these claims were settled for less than the full amount, there may be some money left in the pot. When Avaya files its next quarterly report to the court, we may be able to deduce the amount paid in total, but not the individual settlements.
Claims settled for the scheduled amount: $25,647.
Two claims were settled for the amount assumed in Docket 2194. (Frontier Communications and Michael Carson). There is no leftover money from this group to distribute.
Claims settled for $0.
Four (4) claims were settled with no payment. (Polycom, City of Albany, County of San Diego, Jon Shaw). These claims were reserved at $367,242.
Funds from these claims will be distributed proportionately when Avaya makes its next distribution.
I intend to keep tracking the status of these until they are all resolved.
Bob Emberger
Bob asked me to post this on our website. I would like to thank Bob for his diligence on keeping us informed regarding these payments. He has been working this hard since before his case in Bankruptcy court.
Also, I want to remind you if you did not make your 2018 contribution to our NRLN Chapter you should have received a postcard from the NLRN in last couple of weeks asking for your annual contribution. Below is the form to mail with your contribution and thank you for your continued support.
The NRLN continues to advocate for legislation to protect Social Security, Medicare and reduce the cost of prescription drugs. January 3, 2019 marked the beginning of the 116th Congress with Democrats controlling the U.S. House of Representatives and Republicans controlling the U.S. Senate. All of the bills that the NRLN lobbied for in 2017 and 2018 that were not passed died at the end of the 115th Congress on December 31, 2018. The NRLN is lobbying for the reintroduction and passage of many of those bills.
Please become an individual contributor to the NRLN Avaya Retirees Chapter or renew your membership by making a contribution of $10, $25, $50, $75 or more. Any amount you can contribute will help and be appreciated. You may make your check or money order payable to NRLN, Inc. and mail it with the Contribution Form below in the enclosed envelope. Or, make your contribution with your credit card on the secure NRLN website at www.nrln.org. Click on the red flashing icon “Contribute to the NRLN” and select the credit card option. If you have already made your 2018 contribution, thank you.
----------------------------------------------------------------------------------------------
NRLN INDIVIDUAL CONTRIBUTION FORM Avaya Retirees Chapter
The NRLN is a nonprofit, tax-exempt organization. Contributions are not tax deductible.
Name__________________________________ Age __under 55; __ 55-64; __ 65 or over
Address________________________City_____________State___Zip_____Zip + 4 ____
Phone___________________ Email Address (if available)____________________________
Mail your check or money order of $25, $50, $75 or more (any amount is appreciated) to:
NRLN Inc, PO Box 69051, Baltimore, MD 21264-9051. Or, make a contribution with your
credit card at www.nrln.org. Click on the red flashing icon “Contribute to the NRLN”.
Vern Larson, President,
NRLN Avaya Retirees Chapter
Phone 402-203-6899 Email vernlarson@cox.net
If you know any other Avaya Retirees who are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions please send them the link below and ask them to join the NRLN Avaya Retirees Chapter. All those who have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter at:
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Our Avaya Retirees Chapter NRLN site - http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html - the NRLN home page is http://www.nrln.org/
Unsubscribe | Email Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
New Change in Date for PBGC Letter for In-Pay Salaried Retirees: May 3, 2018
(This message is for Avaya Salaried Retirees and information only for Avaya Represented Retirees.)
The PBGC sent me an update email today informing me that another unavoidable date change was needed.
Sorry for any inconvenience but the mailing date for the in-pay payees had to be changed to May 7, 2018.
We are adding the following to our website:
Trusteeship letters for retirees are scheduled to be mailed on May 7, 2018. The non-payee letters will be issued around the 4th week of May 2018.
Functionality, to set-up your own My Pension Benefit Account (MyPBA) account is temporarily unavailable.
If you are trying to set up a MyPBA account and have received a trusteeship letter, please contact the Customer Contact Center 1-800-400-7242.
Please do not contact the Customer Contact Center until you have received a trusteeship letter.
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
(This message is for Avaya Salaried Retirees and information only for Avaya Represented Retirees.)
The PBGC sent me an update email today informing me that another unavoidable date change was needed.
Sorry for any inconvenience but the mailing date for the in-pay payees had to be changed to May 7, 2018.
We are adding the following to our website:
Trusteeship letters for retirees are scheduled to be mailed on May 7, 2018. The non-payee letters will be issued around the 4th week of May 2018.
Functionality, to set-up your own My Pension Benefit Account (MyPBA) account is temporarily unavailable.
If you are trying to set up a MyPBA account and have received a trusteeship letter, please contact the Customer Contact Center 1-800-400-7242.
Please do not contact the Customer Contact Center until you have received a trusteeship letter.
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Update on PBGC Information for Avaya Salaried Pension Participants: April 26, 2018
(This message is for Avaya Salaried Retirees and information only for Avaya Represented Retirees.)
After receiving numerous questions regarding what will happen when and several from surviving spouses on what they can expect, I contacted the PBGC managing staff responsible for the takeover of our Salaried Pensions. The to those questions and concerns should help clear up most of the items below.
The letters for ONLY in-pay participants will be mailed on May 4th, next Friday.
Once an in-pay participant receives a letter, they can call the 1-800 number outlined on the letter to have our Customer Contact Center assist them in setting up a MyPBA account. The MyPBA account can’t be set-up until they are loaded into our system. This won’t occur until shortly before May 4th.
The PBGC cannot correspond with anyone until they are loaded into their system. They explained that when several Avaya pensioners had called in, the PBGC Customer Contact Center team said there was no information on the Avaya plan. This information will be available by end of next week.
The PBGC has been coordinating with Avaya’s current administration team, Alight Solutions, to hand-off the administration of the in-pay participants at the same time the PBGC is sending out the letters. Their contact center will begin instructing in-pay participants to contact the PBGC next week. Also, please be aware that Avaya’s website for the retiree portal will have a pop-up message stating to contact PBGC. Retirees will no longer be able to make any updates or use the Avaya online system.
The PBGC is currently experiencing some technical difficulties with new users setting up their own MyPBA account. However, participants can still set-up an account by calling the PBGC’s Customer Contact Center. They will set-up the account while on the phone and then you will be able to login and use it from there. However, participants should NOT contact PBGC to set-up an account until they have received their letter.
For the not in-pay participants, PBGC is targeting the end of May to send out a similar notification letter. Similar to the in-pay participants, they aren’t able to have the Customer Contact Center assist them with any questions until they are loaded into the PBGC system. For the not in-pay participants, the Avaya contact center will still be available to answer any questions they may have prior to the notification letters being sent out by the PBGC.
The PBGC appreciates our patience during this transition period. For the in-pay participants, the wait is almost over. For the not in-pay, it will be another month.
I would like to add a note that Avaya and the PBGC are coordinating closely to resolve not in-pay participant’s requests to go into pay. The PBGC is sending recurring files back and forth and have already processed people into pay with PBGC during this transition period.
Reminder excerpted from my earlier post:
From June 1, 2018, State Street Corporation, PBGC’s paying agent, will issue your pension payments. If you use direct deposit, State Street will deposit your pension payments into your account. The PBGC will withhold federal income tax from your payments at your current rate. However, PBGC does not withhold state and local taxes, medical and life insurance premiums and other non-federal deductions. If you have any of these deductions, you will need to make other arrangements to pay them. You will need to make quarterly tax payments.
Under Avaya’s sponsorship, we received a monthly benefit payment that covered our benefit for the previous month. For example, your payment for May 2018 is for your April 2018 benefit. PBGC’s benefit payments cover the benefit for the current month. For example, you will receive your payment for July 2018 on July 1, 2018.
You will receive two payments in June 2018. One payment will be your final payment from Avaya to cover your benefit for May 2018. The other payment will be your PBGC benefit for June 2018.
Court Approved Avaya's Calculations on Supplemental Pensions
Below is the site that you can track the progress of the Avaya bankruptcy filing in court. This will provide information about the case, including access to court documents.
As you know Avaya has filed for Chapter 11 Bankruptcy. For those of us who filed a Proof of Claim when on Feb. 1st 2018 Avaya stopped paying our Supplemental Pensions the answer to our claims is in now.
Check out Docket # 1964, yesterday April 25, 2018, the court approved Avaya's calculations of the value of our supplemental pensions. Also, they voided all the OPEB claims that we had submitted.
An exception to this are those few individuals who took the time to file an objection to Avaya's valuation, those will be handled individually by the court. They each were overnighted a letter directly to them. Our settlement will be whatever the court approves to pay out from the bucket of money that was set aside for unsecured debt. Pennies on the dollar. A couple of the lawsuits that have been holding up the courts final order have been cleared by the court. One major suit is still pending.
https://cases.primeclerk.com/avaya/
Visit Chapter’s Webpage
Check out our NRLN Avaya Retirees Chapter's webpage often for new information. Go to www.nrln.org. You can also find the Avaya Chapter webpage listed first in the tab
under NRLN Chapters.
Vern Larson, President,
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
phone: 402-203-6899
(This message is for Avaya Salaried Retirees and information only for Avaya Represented Retirees.)
After receiving numerous questions regarding what will happen when and several from surviving spouses on what they can expect, I contacted the PBGC managing staff responsible for the takeover of our Salaried Pensions. The to those questions and concerns should help clear up most of the items below.
The letters for ONLY in-pay participants will be mailed on May 4th, next Friday.
Once an in-pay participant receives a letter, they can call the 1-800 number outlined on the letter to have our Customer Contact Center assist them in setting up a MyPBA account. The MyPBA account can’t be set-up until they are loaded into our system. This won’t occur until shortly before May 4th.
The PBGC cannot correspond with anyone until they are loaded into their system. They explained that when several Avaya pensioners had called in, the PBGC Customer Contact Center team said there was no information on the Avaya plan. This information will be available by end of next week.
The PBGC has been coordinating with Avaya’s current administration team, Alight Solutions, to hand-off the administration of the in-pay participants at the same time the PBGC is sending out the letters. Their contact center will begin instructing in-pay participants to contact the PBGC next week. Also, please be aware that Avaya’s website for the retiree portal will have a pop-up message stating to contact PBGC. Retirees will no longer be able to make any updates or use the Avaya online system.
The PBGC is currently experiencing some technical difficulties with new users setting up their own MyPBA account. However, participants can still set-up an account by calling the PBGC’s Customer Contact Center. They will set-up the account while on the phone and then you will be able to login and use it from there. However, participants should NOT contact PBGC to set-up an account until they have received their letter.
For the not in-pay participants, PBGC is targeting the end of May to send out a similar notification letter. Similar to the in-pay participants, they aren’t able to have the Customer Contact Center assist them with any questions until they are loaded into the PBGC system. For the not in-pay participants, the Avaya contact center will still be available to answer any questions they may have prior to the notification letters being sent out by the PBGC.
The PBGC appreciates our patience during this transition period. For the in-pay participants, the wait is almost over. For the not in-pay, it will be another month.
I would like to add a note that Avaya and the PBGC are coordinating closely to resolve not in-pay participant’s requests to go into pay. The PBGC is sending recurring files back and forth and have already processed people into pay with PBGC during this transition period.
Reminder excerpted from my earlier post:
From June 1, 2018, State Street Corporation, PBGC’s paying agent, will issue your pension payments. If you use direct deposit, State Street will deposit your pension payments into your account. The PBGC will withhold federal income tax from your payments at your current rate. However, PBGC does not withhold state and local taxes, medical and life insurance premiums and other non-federal deductions. If you have any of these deductions, you will need to make other arrangements to pay them. You will need to make quarterly tax payments.
Under Avaya’s sponsorship, we received a monthly benefit payment that covered our benefit for the previous month. For example, your payment for May 2018 is for your April 2018 benefit. PBGC’s benefit payments cover the benefit for the current month. For example, you will receive your payment for July 2018 on July 1, 2018.
You will receive two payments in June 2018. One payment will be your final payment from Avaya to cover your benefit for May 2018. The other payment will be your PBGC benefit for June 2018.
Court Approved Avaya's Calculations on Supplemental Pensions
Below is the site that you can track the progress of the Avaya bankruptcy filing in court. This will provide information about the case, including access to court documents.
As you know Avaya has filed for Chapter 11 Bankruptcy. For those of us who filed a Proof of Claim when on Feb. 1st 2018 Avaya stopped paying our Supplemental Pensions the answer to our claims is in now.
Check out Docket # 1964, yesterday April 25, 2018, the court approved Avaya's calculations of the value of our supplemental pensions. Also, they voided all the OPEB claims that we had submitted.
An exception to this are those few individuals who took the time to file an objection to Avaya's valuation, those will be handled individually by the court. They each were overnighted a letter directly to them. Our settlement will be whatever the court approves to pay out from the bucket of money that was set aside for unsecured debt. Pennies on the dollar. A couple of the lawsuits that have been holding up the courts final order have been cleared by the court. One major suit is still pending.
https://cases.primeclerk.com/avaya/
Visit Chapter’s Webpage
Check out our NRLN Avaya Retirees Chapter's webpage often for new information. Go to www.nrln.org. You can also find the Avaya Chapter webpage listed first in the tab
under NRLN Chapters.
Vern Larson, President,
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
phone: 402-203-6899
NRLN Avaya Retirees Chapter Update: April 17, 2018
First Portion Concerns Avaya Salaried Retirees:
(This message is for Avaya Salaried Retirees and information only for Avaya Represented Retirees)
This portion of the Avaya Chapter Update concerns the upcoming Pension Benefit Guaranty Corporation (PBGC) informational letter to all Avaya Salaried Retirees that are currently in-pay status. Those already retired and currently drawing their pensions are scheduled to be mailed the letter next week. Those that are not yet in-pay status (vested) will receive their letters in the coming weeks.
PBGC, a U.S. Government agency, is now responsible for your pension plan. PBGC insures private pension plans like yours and protects the benefits of workers and retirees covered by those plans. If a plan ends after a sponsoring employer has failed to put in enough money to pay all promised benefits, PBGC steps in to pay benefits, up to the limits set by Congress.
The PBGC letter will include a link to a “Welcome” page on the PBGC website, www.pbgc.gov/welcome. There you’ll find all of the links to an introductory video about PBGC, frequently asked questions, and the 2017 monthly guarantee limits that apply to your plan.
The PBGC provides the ‘Safest Way’ to receive your payment.
Change in Paying Agent
From June 1, 2018, State Street Corporation, PBGC’s paying agent, will issue your pension payments. If you use direct deposit, State Street will deposit your pension payments into your account. The PBGC will withhold federal income tax from your payments at your current rate. However, PBGC does not withhold state and local taxes, medical and life insurance premiums and other non-federal deductions. If you have any of these deductions, you will need to make other arrangements to pay them. You will need to make quarterly tax payments.
Under Avaya’s sponsorship, we received a monthly benefit payment that covered our benefit for the previous month. For example, your payment for May 2018 is for your April 2018 benefit. PBGC’s benefit payments cover the benefit for the current month. For example, you will receive your payment for July 2018 on July 1, 2018.
You will receive two payments in June 2018. One payment will be your final payment from Avaya to cover your benefit for May 2018. The other payment will be your PBGC benefit for June 2018.
About PBGC Form 701
I have received many questions about Form 701, in order for the PBGC to continue paying you, you must complete and return the Form 701 - Payee Information within 30 days of the date of your letter.
Remember wait for your letter to fill out the form, knowing any delay in completing the form on time will suspend your payments. A postage-paid reply envelope will be enclosed. Or, you may complete this form using the online PBGC service, MyPBA.
PBGC states that the easiest way to do business with PBGC is through their online service, MyPBA. The letter will provide the website to get you started.
Using the MyPBA, we can:
? Complete the Payee Information Form 701
? Update your contact information
? Designate a beneficiary
? Update Federal Tax Withholding
? Designate or edit your Federal Tax Withholdings
Health Coverage Tax Credit (HCTC)
The HCTC is an IRS tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. If you are 55 – 65 years old and are receiving benefits from PBGC, you may be eligible for this tax credit. For more information, please visit the IRS web site at www.irs.gov/HCTC.
May 1, 2018 Date
May 1, 2018 is the date for those of us that are already in-pay status, ones that are currently receiving their pensions will be the initial data feeds to the PBGC. In order to make the first PBGC payroll.
Those not currently in-pay status; those vested who may still be working, those vested and to young to collect a pension, those with a disability pension, etc. will receive their letter later. The PBGC is targeting these letters for June 1st.
PBGC’s legal counsel determined that the Avaya pension plan, which they are now trustee of, is responsible for monthly payments for disabled participants after they turn age 65. Those in that universe will be loaded into the PBGC systems and can be confident that PBGC will definitely cover and pay their pension payments from age 65 and thereafter.
Before age 65, the company is responsible for paying these benefits. Avaya and PBGC worked in coordination so that pension payments would remain the same. The company is now paying the part of the benefit that was paid by the Avaya pension plan prior to PBGC becoming trustee.
As a small clarification, people in these categories not in-pay status participants won’t be loaded until mid-May vs the in-pay status group which will be loaded by the end of this month. Those affected will receive a trusteeship letter in mid to late May stating they are a participant due future benefits from PBGC.
PBGC's Paid Out Benefits in 2017
Also, click the following link for those curious on how much PBGC paid out in pension benefits in your state? Your Congressional district? 2017 State-by-State Pension Benefit Payments . You can find out by clicking on our state-by-state listing. This listing breaks down the benefits PBGC paid to its participants in 2017. It shows the total amount of benefits paid and the number of people receiving payments in each state. The benefits are from single-employer plans that PBGC trusteed over the years. The total benefit amount paid in 2017 was $5.6 billion to about 868,000 retirees.
PBGC is committed to paying benefits in an accurate and timely manner. PBGC strives to provide excellent customer service to the retirees that it pays. PBGC received a satisfaction score of 91, which is among the best in public and private sectors, according to the American Customer Satisfaction Index.
To learn more about PBGC’s mission, vision, values and long-term goals, please visit its newly released Fiscal Year 2018-2022 Strategic Plan. Drawn from best practices, stakeholder feedback and lessons learned, this plan is its roadmap to enhance the agency’s mission and operations.
*This data is from the 2017 calendar year.
Click the following link for the NRLN Spring Newsletter. It contains information about PBGC and NRLN Avaya Retirees Chapter at the NRLN's March conference in Washington, DC.
https://www.nrln.org/Newsletters/NRLN%20FOCUS%202018%20Spring.pdf
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
First Portion Concerns Avaya Salaried Retirees:
(This message is for Avaya Salaried Retirees and information only for Avaya Represented Retirees)
This portion of the Avaya Chapter Update concerns the upcoming Pension Benefit Guaranty Corporation (PBGC) informational letter to all Avaya Salaried Retirees that are currently in-pay status. Those already retired and currently drawing their pensions are scheduled to be mailed the letter next week. Those that are not yet in-pay status (vested) will receive their letters in the coming weeks.
PBGC, a U.S. Government agency, is now responsible for your pension plan. PBGC insures private pension plans like yours and protects the benefits of workers and retirees covered by those plans. If a plan ends after a sponsoring employer has failed to put in enough money to pay all promised benefits, PBGC steps in to pay benefits, up to the limits set by Congress.
The PBGC letter will include a link to a “Welcome” page on the PBGC website, www.pbgc.gov/welcome. There you’ll find all of the links to an introductory video about PBGC, frequently asked questions, and the 2017 monthly guarantee limits that apply to your plan.
The PBGC provides the ‘Safest Way’ to receive your payment.
Change in Paying Agent
From June 1, 2018, State Street Corporation, PBGC’s paying agent, will issue your pension payments. If you use direct deposit, State Street will deposit your pension payments into your account. The PBGC will withhold federal income tax from your payments at your current rate. However, PBGC does not withhold state and local taxes, medical and life insurance premiums and other non-federal deductions. If you have any of these deductions, you will need to make other arrangements to pay them. You will need to make quarterly tax payments.
Under Avaya’s sponsorship, we received a monthly benefit payment that covered our benefit for the previous month. For example, your payment for May 2018 is for your April 2018 benefit. PBGC’s benefit payments cover the benefit for the current month. For example, you will receive your payment for July 2018 on July 1, 2018.
You will receive two payments in June 2018. One payment will be your final payment from Avaya to cover your benefit for May 2018. The other payment will be your PBGC benefit for June 2018.
About PBGC Form 701
I have received many questions about Form 701, in order for the PBGC to continue paying you, you must complete and return the Form 701 - Payee Information within 30 days of the date of your letter.
Remember wait for your letter to fill out the form, knowing any delay in completing the form on time will suspend your payments. A postage-paid reply envelope will be enclosed. Or, you may complete this form using the online PBGC service, MyPBA.
PBGC states that the easiest way to do business with PBGC is through their online service, MyPBA. The letter will provide the website to get you started.
Using the MyPBA, we can:
? Complete the Payee Information Form 701
? Update your contact information
? Designate a beneficiary
? Update Federal Tax Withholding
? Designate or edit your Federal Tax Withholdings
Health Coverage Tax Credit (HCTC)
The HCTC is an IRS tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. If you are 55 – 65 years old and are receiving benefits from PBGC, you may be eligible for this tax credit. For more information, please visit the IRS web site at www.irs.gov/HCTC.
May 1, 2018 Date
May 1, 2018 is the date for those of us that are already in-pay status, ones that are currently receiving their pensions will be the initial data feeds to the PBGC. In order to make the first PBGC payroll.
Those not currently in-pay status; those vested who may still be working, those vested and to young to collect a pension, those with a disability pension, etc. will receive their letter later. The PBGC is targeting these letters for June 1st.
PBGC’s legal counsel determined that the Avaya pension plan, which they are now trustee of, is responsible for monthly payments for disabled participants after they turn age 65. Those in that universe will be loaded into the PBGC systems and can be confident that PBGC will definitely cover and pay their pension payments from age 65 and thereafter.
Before age 65, the company is responsible for paying these benefits. Avaya and PBGC worked in coordination so that pension payments would remain the same. The company is now paying the part of the benefit that was paid by the Avaya pension plan prior to PBGC becoming trustee.
As a small clarification, people in these categories not in-pay status participants won’t be loaded until mid-May vs the in-pay status group which will be loaded by the end of this month. Those affected will receive a trusteeship letter in mid to late May stating they are a participant due future benefits from PBGC.
PBGC's Paid Out Benefits in 2017
Also, click the following link for those curious on how much PBGC paid out in pension benefits in your state? Your Congressional district? 2017 State-by-State Pension Benefit Payments . You can find out by clicking on our state-by-state listing. This listing breaks down the benefits PBGC paid to its participants in 2017. It shows the total amount of benefits paid and the number of people receiving payments in each state. The benefits are from single-employer plans that PBGC trusteed over the years. The total benefit amount paid in 2017 was $5.6 billion to about 868,000 retirees.
PBGC is committed to paying benefits in an accurate and timely manner. PBGC strives to provide excellent customer service to the retirees that it pays. PBGC received a satisfaction score of 91, which is among the best in public and private sectors, according to the American Customer Satisfaction Index.
To learn more about PBGC’s mission, vision, values and long-term goals, please visit its newly released Fiscal Year 2018-2022 Strategic Plan. Drawn from best practices, stakeholder feedback and lessons learned, this plan is its roadmap to enhance the agency’s mission and operations.
*This data is from the 2017 calendar year.
Click the following link for the NRLN Spring Newsletter. It contains information about PBGC and NRLN Avaya Retirees Chapter at the NRLN's March conference in Washington, DC.
https://www.nrln.org/Newsletters/NRLN%20FOCUS%202018%20Spring.pdf
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
NRLN Avaya Retirees Chapter News – April 2, 2018
Avaya Salaried Pension Plan Retirees Update on Upcoming Events with PGBC
Those of us who are already retired and collecting our pensions from the Avaya Salaried Pension Plan have had no word from Avaya about changes affecting our pensions since the court ordered the Pension Benefit Guaranty Corporation (PBGC) to become the actual trustee of our pensions on December 15, 2017. Well, the wait is almost over now.
PBGC, a U.S. Government Agency will mail out a letter in the 3rd week of April to each of us explaining what will happen and when.
The PBGC is now responsible for your pension plan. PBGC insures private pension plans like ours and protects the benefits of workers and retirees covered by those plans. If a plan ends after a sponsoring employer has failed to put in enough money to pay all promised benefits, PBGC steps in to pay benefits, up to the limits set by Congress.
First off their will be a change in Paying Agent.
On June 1, 2018, State Street Corporation, the PBGC’s paying agent, will issue your pension payments. If you use direct deposit, State Street will deposit your pension payments into your account.
The PBGC will withhold federal income taxes from your payments at your current rate. However, the PBGC does not withhold state and local taxes, medical and life insurance premiums and other non-federal deductions.
If you have any of these deductions, (Important) you will need to make other arrangements to pay these. Remember, No state taxes will be paid by the PBGC.
Also important is that under Avaya’s sponsorship, we have always received a monthly benefit payment that covered our pension benefit for the previous month. This will be explained better in the letter you will receive.
Basically, your payment for May 2018 is for your April 2018 benefit.
PBGC’s benefit payments cover the benefit for the current month. This means, you will receive your payment for July 2018 on July 1, 2018.
Because of these two different payment cycles, you will receive two payments in June 2018. One payment will be your final payment from Avaya to cover your benefit for May 2018. The other payment will be your PBGC benefit for June 2018. I know some people will be very happy, wow an extra payment, and some will not. Tax reasons.
PBGC will need each of us fill out a form and return to them.
Important: In order for PBGC to continue paying you, you must complete and return the enclosed Form 701 that will be in the PBGC’s letter - Payee Information within 30 days of the date of their letter.
Delay in the PBGC receiving your completed form will require them to suspend your payments. Don’t let that happen. A postage-paid reply envelope will be enclosed for your convenience. If you prefer, you may complete the form using their online service, MyPBA. Online Pension Transactions with MyPBA.
It is important to note that the easiest way to do business with the PBGC is through their online service, MyPBA. To get started go to the website,www.pbgc.gov/welcome, and click on the link to MyPBA.
Using this MyPBA, link you can:
? Complete the Payee Information Form 701
? Update your contact information
? Designate a beneficiary
? Update Federal Tax Withholding
? Designate or edit your Federal Tax Withholdings
If you are unable to access MyPBA, you can call the PGBC at 1-800-400-7242.
How PBGC processes your plan
As we all know, the PBGC pays benefits up to limits set by Congress. They will review our plan’s records to determine the benefit amount they can pay you. During the review, you will continue to receive
your pension payments without interruption. Until they complete their review, the pension payments you receive are estimated payments. When their review is complete, they will send you a formal determination
of your benefit. If your pension payment amount exceeds the legal limits set by Congress, the PBGC will have to reduce your payment amount. The PBGC will also tell you what rights you have to appeal your benefit determination. Those that had their pensions discounted because of exceeding the allowable limits should already know because Avaya started paying the discounted amount since January 2017.
Health Coverage Tax Credit (HCTC)
The HCTC is an IRS tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. If you are 55 – 65 years old and are receiving benefits from PBGC, you may
be eligible for this tax credit. For more information, please visit the IRS web site at www.irs.gov/HCTC.
HCTC – Coverage starts, up to IRS, they are looking into it.
When does HCTC – Coverage start for us? It is up to IRS, they are looking into it.
Since IRS is looking into it the actual date of court ruling of December 15th 2017 that Avaya moved our pension to PBGC, may not be the date that PBGC actually starts paying us… this could be important for those that are eligible for the HCTC. If the IRS approves that contention, some may be able to qualify for the supplement payment for December 2017. Also if the IRS approves those eligible may also claim for the months for 2018. The IRS is the one that will make this determination.
Questions:
If you have questions or need assistance, please call us at 1-800-400-7242, or you may write to the PBGC. Please include your Social Security number, PBGC case number, 23167000, and a daytime telephone number. If you use a TTY/ASCII, call 1 800-877-8339 and give the relay operator the telephone number.
Because the PBGC cannot correspond to us specifically until our names are loaded in its system, that is another reason that we have not had any updates from them. That will happen soon so everything will be much more transparent going forward.
Remember to fill out Form 701. It is critical that you return “I am, an in payee”. You will receive one 30-day follow up to file, if you do not they will discontinue payments.
For current information on the Avaya Chapter 11 Court proceedings clink primeclerk link below
https://cases.primeclerk.com/avaya/
Check out our NRLN and the Avaya Retirees Chapter's webpage often for new information. To learn more about the NRLN go to: http://www.nrln.org/. You can find the Avaya Chapter webpage listed first under the tab NRLN Chapters under the main banner on the NRLN website.
If you know any other Avaya Retirees who are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions, please send them this link below and ask them to join. All those that have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter. http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Regards,
Vern Larson, President,
NRLN Avaya Retirees Chapter
Phone: 402-203-6899,
Emailvernlarson@cox.net
Avaya Salaried Pension Plan Retirees Update on Upcoming Events with PGBC
Those of us who are already retired and collecting our pensions from the Avaya Salaried Pension Plan have had no word from Avaya about changes affecting our pensions since the court ordered the Pension Benefit Guaranty Corporation (PBGC) to become the actual trustee of our pensions on December 15, 2017. Well, the wait is almost over now.
PBGC, a U.S. Government Agency will mail out a letter in the 3rd week of April to each of us explaining what will happen and when.
The PBGC is now responsible for your pension plan. PBGC insures private pension plans like ours and protects the benefits of workers and retirees covered by those plans. If a plan ends after a sponsoring employer has failed to put in enough money to pay all promised benefits, PBGC steps in to pay benefits, up to the limits set by Congress.
First off their will be a change in Paying Agent.
On June 1, 2018, State Street Corporation, the PBGC’s paying agent, will issue your pension payments. If you use direct deposit, State Street will deposit your pension payments into your account.
The PBGC will withhold federal income taxes from your payments at your current rate. However, the PBGC does not withhold state and local taxes, medical and life insurance premiums and other non-federal deductions.
If you have any of these deductions, (Important) you will need to make other arrangements to pay these. Remember, No state taxes will be paid by the PBGC.
Also important is that under Avaya’s sponsorship, we have always received a monthly benefit payment that covered our pension benefit for the previous month. This will be explained better in the letter you will receive.
Basically, your payment for May 2018 is for your April 2018 benefit.
PBGC’s benefit payments cover the benefit for the current month. This means, you will receive your payment for July 2018 on July 1, 2018.
Because of these two different payment cycles, you will receive two payments in June 2018. One payment will be your final payment from Avaya to cover your benefit for May 2018. The other payment will be your PBGC benefit for June 2018. I know some people will be very happy, wow an extra payment, and some will not. Tax reasons.
PBGC will need each of us fill out a form and return to them.
Important: In order for PBGC to continue paying you, you must complete and return the enclosed Form 701 that will be in the PBGC’s letter - Payee Information within 30 days of the date of their letter.
Delay in the PBGC receiving your completed form will require them to suspend your payments. Don’t let that happen. A postage-paid reply envelope will be enclosed for your convenience. If you prefer, you may complete the form using their online service, MyPBA. Online Pension Transactions with MyPBA.
It is important to note that the easiest way to do business with the PBGC is through their online service, MyPBA. To get started go to the website,www.pbgc.gov/welcome, and click on the link to MyPBA.
Using this MyPBA, link you can:
? Complete the Payee Information Form 701
? Update your contact information
? Designate a beneficiary
? Update Federal Tax Withholding
? Designate or edit your Federal Tax Withholdings
If you are unable to access MyPBA, you can call the PGBC at 1-800-400-7242.
How PBGC processes your plan
As we all know, the PBGC pays benefits up to limits set by Congress. They will review our plan’s records to determine the benefit amount they can pay you. During the review, you will continue to receive
your pension payments without interruption. Until they complete their review, the pension payments you receive are estimated payments. When their review is complete, they will send you a formal determination
of your benefit. If your pension payment amount exceeds the legal limits set by Congress, the PBGC will have to reduce your payment amount. The PBGC will also tell you what rights you have to appeal your benefit determination. Those that had their pensions discounted because of exceeding the allowable limits should already know because Avaya started paying the discounted amount since January 2017.
Health Coverage Tax Credit (HCTC)
The HCTC is an IRS tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. If you are 55 – 65 years old and are receiving benefits from PBGC, you may
be eligible for this tax credit. For more information, please visit the IRS web site at www.irs.gov/HCTC.
HCTC – Coverage starts, up to IRS, they are looking into it.
When does HCTC – Coverage start for us? It is up to IRS, they are looking into it.
Since IRS is looking into it the actual date of court ruling of December 15th 2017 that Avaya moved our pension to PBGC, may not be the date that PBGC actually starts paying us… this could be important for those that are eligible for the HCTC. If the IRS approves that contention, some may be able to qualify for the supplement payment for December 2017. Also if the IRS approves those eligible may also claim for the months for 2018. The IRS is the one that will make this determination.
Questions:
If you have questions or need assistance, please call us at 1-800-400-7242, or you may write to the PBGC. Please include your Social Security number, PBGC case number, 23167000, and a daytime telephone number. If you use a TTY/ASCII, call 1 800-877-8339 and give the relay operator the telephone number.
Because the PBGC cannot correspond to us specifically until our names are loaded in its system, that is another reason that we have not had any updates from them. That will happen soon so everything will be much more transparent going forward.
Remember to fill out Form 701. It is critical that you return “I am, an in payee”. You will receive one 30-day follow up to file, if you do not they will discontinue payments.
For current information on the Avaya Chapter 11 Court proceedings clink primeclerk link below
https://cases.primeclerk.com/avaya/
Check out our NRLN and the Avaya Retirees Chapter's webpage often for new information. To learn more about the NRLN go to: http://www.nrln.org/. You can find the Avaya Chapter webpage listed first under the tab NRLN Chapters under the main banner on the NRLN website.
If you know any other Avaya Retirees who are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions, please send them this link below and ask them to join. All those that have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter. http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Regards,
Vern Larson, President,
NRLN Avaya Retirees Chapter
Phone: 402-203-6899,
Emailvernlarson@cox.net
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: The Wait Is Almost Over
I was in Washington, DC last week attending the spring NRLN Leadership Conference. On Monday, March 12, 2018, I met with Michael Rae, Deputy Chief Policy Officer of the Pension Benefit Guaranty Corporation and his staff. (In the photo, Mr. Rae is on the left and I'm to his left.) We had a very productive meeting discussing the takeover of the Avaya Salaried Pension Plan.
Prior to our meeting I had provided them with a list of questions and concerns that I had collected from several Chapter members. We discussed many of them in detail and subsequently they posted the following information this weekend. I will also send out an update on the conference and of our lobbing meetings.
AVAYA, INC. PENSION PLAN FOR SALARIED EMPLOYEES
Trusteeship letters for retirees will be issued around the 3rd week of April, 2018.
The non-payee letters will be issued around the 4th week of April, 2018.
Overview
Sponsor: AVAYA INC.
Case number: 23167000
Termination date: November 30, 2017
Trusteeship date: December 15, 2017
Participants Number:7978
Plan Status - Trusteeship
PBGC has taken over as trustee of your pension plan. PBGC is now responsible for paying your pension benefits up to the limits set by law.
What this means for you:
· Expect a letter in the mail from PBGC informing you that we are now responsible for paying your pension benefits.
· If you are already receiving pension benefits from your plan, we will continue paying you without interruption. These payments will be an estimate of the benefits that PBGC can pay. Your benefit may be adjusted for the limits set by law. Due to these limits, some participants may receive a pension benefit that is less than the amount provided for by the plan.
· If you are not yet receiving pension benefits, find out more about when you can apply for a pension, here: Apply for your pension benefits. To find out more about PBGC and the limits set by law, see: Maximum monthly guarantee tables, Payment Amount
PBGC's Next Steps:
-- PBGC will collect and verify information about all participants and beneficiaries.
-- Review and verify plan and participant records
-- Calculate benefits, subject to legal limits, owed to all participants and beneficiaries
PBGC Is Working to Pay Current Pension Payees in June 2018
To the PBGC link:
https://www.pbgc.gov/wr/trusteed/plans/plan-23167000
They are shooting to pay current pension payees in June. Patience. More to follow.
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: The Wait Is Almost Over
I was in Washington, DC last week attending the spring NRLN Leadership Conference. On Monday, March 12, 2018, I met with Michael Rae, Deputy Chief Policy Officer of the Pension Benefit Guaranty Corporation and his staff. (In the photo, Mr. Rae is on the left and I'm to his left.) We had a very productive meeting discussing the takeover of the Avaya Salaried Pension Plan.
Prior to our meeting I had provided them with a list of questions and concerns that I had collected from several Chapter members. We discussed many of them in detail and subsequently they posted the following information this weekend. I will also send out an update on the conference and of our lobbing meetings.
AVAYA, INC. PENSION PLAN FOR SALARIED EMPLOYEES
Trusteeship letters for retirees will be issued around the 3rd week of April, 2018.
The non-payee letters will be issued around the 4th week of April, 2018.
Overview
Sponsor: AVAYA INC.
Case number: 23167000
Termination date: November 30, 2017
Trusteeship date: December 15, 2017
Participants Number:7978
Plan Status - Trusteeship
PBGC has taken over as trustee of your pension plan. PBGC is now responsible for paying your pension benefits up to the limits set by law.
What this means for you:
· Expect a letter in the mail from PBGC informing you that we are now responsible for paying your pension benefits.
· If you are already receiving pension benefits from your plan, we will continue paying you without interruption. These payments will be an estimate of the benefits that PBGC can pay. Your benefit may be adjusted for the limits set by law. Due to these limits, some participants may receive a pension benefit that is less than the amount provided for by the plan.
· If you are not yet receiving pension benefits, find out more about when you can apply for a pension, here: Apply for your pension benefits. To find out more about PBGC and the limits set by law, see: Maximum monthly guarantee tables, Payment Amount
PBGC's Next Steps:
-- PBGC will collect and verify information about all participants and beneficiaries.
-- Review and verify plan and participant records
-- Calculate benefits, subject to legal limits, owed to all participants and beneficiaries
PBGC Is Working to Pay Current Pension Payees in June 2018
To the PBGC link:
https://www.pbgc.gov/wr/trusteed/plans/plan-23167000
They are shooting to pay current pension payees in June. Patience. More to follow.
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, Chapter President
Subject: PBGC to Pay Pension Benefits for Salaried Employees and Retirees of Avaya, Inc.
FOR IMMEDIATE RELEASE
December 15, 2017
WASHINGTON — The Pension Benefit Guaranty Corporation will pay retirement benefits for nearly 8,000 current and future retirees who participated in the Avaya, Inc. Pension Plan for Salaried Employees.
Avaya filed for Chapter 11 protection last January and is emerging from bankruptcy. The company asked the bankruptcy court to allow it to end its salaried plan. That motion was granted, and termination of the pension plan went into effect on November 30, 2017, the date proposed by Avaya in notices sent to participants.
The Avaya salaried plan is 63% funded, with plan assets of $1.6 billion and liabilities for future benefits of $2.5 billion, and thus is underfunded by $938 million. Benefit accruals under the plan have been frozen since 2003.
PBGC will pay pension benefits earned by retirees of Avaya’s salaried plan, up to the legal limits.
Retirees will continue to receive benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.
A separate plan, the Avaya, Inc. Pension Plan, which covers nearly 7,000 participants, remains ongoing and is sponsored by the reorganized Avaya.
Retirees who will receive a benefit from PBGC may be eligible for the federal Health Coverage Tax Credit (HCTC), an IRS tax credit for health care insurance premiums. Visit PBGC's HCTC webpage, to view information on the tax credit.
Avaya, incorporated in 2000 when Lucent Technologies spun off its enterprise communications group, provides contact center and unified communications products and services worldwide. Avaya is headquartered in Santa Clara, California.
About PBGC
PBGC protects the pension benefits of nearly 40 million Americans in private-sector pension plans. The agency operates two separate insurance programs — one covering pension plans sponsored by a single employer and another covering multiemployer pension plans, which are sponsored by more than one employer and maintained under collective bargaining agreements. PBGC is currently responsible for the benefits of about 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income, and, for the single-employer program, assets and recoveries from failed single-employer plans. For more information, visit PBGC.gov.
PBGC Number:
17-11
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
From: Vern Larson, Chapter President
Subject: PBGC to Pay Pension Benefits for Salaried Employees and Retirees of Avaya, Inc.
FOR IMMEDIATE RELEASE
December 15, 2017
WASHINGTON — The Pension Benefit Guaranty Corporation will pay retirement benefits for nearly 8,000 current and future retirees who participated in the Avaya, Inc. Pension Plan for Salaried Employees.
Avaya filed for Chapter 11 protection last January and is emerging from bankruptcy. The company asked the bankruptcy court to allow it to end its salaried plan. That motion was granted, and termination of the pension plan went into effect on November 30, 2017, the date proposed by Avaya in notices sent to participants.
The Avaya salaried plan is 63% funded, with plan assets of $1.6 billion and liabilities for future benefits of $2.5 billion, and thus is underfunded by $938 million. Benefit accruals under the plan have been frozen since 2003.
PBGC will pay pension benefits earned by retirees of Avaya’s salaried plan, up to the legal limits.
Retirees will continue to receive benefits without interruption, and future retirees can apply for benefits as soon as they are eligible.
A separate plan, the Avaya, Inc. Pension Plan, which covers nearly 7,000 participants, remains ongoing and is sponsored by the reorganized Avaya.
Retirees who will receive a benefit from PBGC may be eligible for the federal Health Coverage Tax Credit (HCTC), an IRS tax credit for health care insurance premiums. Visit PBGC's HCTC webpage, to view information on the tax credit.
Avaya, incorporated in 2000 when Lucent Technologies spun off its enterprise communications group, provides contact center and unified communications products and services worldwide. Avaya is headquartered in Santa Clara, California.
About PBGC
PBGC protects the pension benefits of nearly 40 million Americans in private-sector pension plans. The agency operates two separate insurance programs — one covering pension plans sponsored by a single employer and another covering multiemployer pension plans, which are sponsored by more than one employer and maintained under collective bargaining agreements. PBGC is currently responsible for the benefits of about 1.5 million people in failed pension plans. PBGC receives no taxpayer dollars. Its operations are financed by insurance premiums, investment income, and, for the single-employer program, assets and recoveries from failed single-employer plans. For more information, visit PBGC.gov.
PBGC Number:
17-11
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, Chapter President
Subject: Avaya Successfully Completes Financial Restructuring and Emerges from Chapter 11
Santa Clara, Calif. - December 15, 2017 - Avaya Holdings Corp. (“Avaya” or the “Company”) announced that it has successfully completed its debt restructuring and emerged from chapter 11.
“This is the beginning of an important new chapter for Avaya,” said Jim Chirico, Avaya’s president and CEO. “In less than a year since the commencement of our chapter 11 restructuring, Avaya has emerged as a publicly traded company with a significantly strengthened balance sheet. Overall, we reduced our prior debt load by approximately $3 billion, and we exit today with more than $300 million in cash on our balance sheet. The reduction of our debt and certain other long-term obligations will also improve annual cash flow by approximately $300 million compared to fiscal 2016.”
“We have the flexibility we need to invest in the large and growing contact center and unified communications markets as we complete our transformation to a software, services and cloud solutions provider,” Chirico added. “With a new Board and leadership team firmly in place, Avaya is now well-positioned to execute on its growth plan and deliver the returns and value expected by our stakeholders.”
Avaya is taking the steps necessary to list on the New York Stock Exchange. The company expects to have approximately 110 million shares outstanding upon emergence.
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the company’s restructuring counsel.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
From: Vern Larson, Chapter President
Subject: Avaya Successfully Completes Financial Restructuring and Emerges from Chapter 11
Santa Clara, Calif. - December 15, 2017 - Avaya Holdings Corp. (“Avaya” or the “Company”) announced that it has successfully completed its debt restructuring and emerged from chapter 11.
“This is the beginning of an important new chapter for Avaya,” said Jim Chirico, Avaya’s president and CEO. “In less than a year since the commencement of our chapter 11 restructuring, Avaya has emerged as a publicly traded company with a significantly strengthened balance sheet. Overall, we reduced our prior debt load by approximately $3 billion, and we exit today with more than $300 million in cash on our balance sheet. The reduction of our debt and certain other long-term obligations will also improve annual cash flow by approximately $300 million compared to fiscal 2016.”
“We have the flexibility we need to invest in the large and growing contact center and unified communications markets as we complete our transformation to a software, services and cloud solutions provider,” Chirico added. “With a new Board and leadership team firmly in place, Avaya is now well-positioned to execute on its growth plan and deliver the returns and value expected by our stakeholders.”
Avaya is taking the steps necessary to list on the New York Stock Exchange. The company expects to have approximately 110 million shares outstanding upon emergence.
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the company’s restructuring counsel.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Are you having trouble viewing this message? Click here
Click To View Documents: CWA supports the Plan.pdf (41KB);
NRLN Avaya Retirees Chapter Updates – Dec. 5, 2017
I have been receiving numerous questions from members regarding the Court’s recent expected approval of The 2ndAmended Plan of Reorganization. What happens to us now? Well, it depends.
Key items:
The Avaya pension center will be paying the Jan 1st paychecks. Avaya is currently awaiting for the Pension Benefit Guaranty Corporation (PBGC) to set up a transition team. I have been told it sometimes takes several months for final transition over to the PBGC’s pay agent… patience is needed.
There are around 70 pensioners that will be over the PBGC maximum payouts, they will be receiving a communication informing them that their payment is being cut back to the PBGC maximums.
If a pay date is on a banking holiday, like this coming January 1st 2018, it is paid the next day. Paper checks are mailed prior to the pay date.
Supplemental Pension payouts. Show me the money!
The supplemental payout is paid on a pro rata basis, (that is proportional, in Bankruptcy the money in that pool is divided proportionately among all of the creditors in the pool. To clarify, I have not heard any official time frame as yet on when the payments will be made.
I do know they (the attorneys) have a lot a work to do before they can start paying. They will continue working on the claims, approving, disallowing and even expunging where needed. One issue is there are many supplemental claims where the person checked the box on the Proof of Claim form that stated their claim was a Priority claim. These claims were originally placed in an administrative priority bucket that could be paid out all the way up to 100%.
All of those claims needed to be culled out and reclassified as all of the unsecured supplemental claims and be paid the “Plan’s” pro rata rate, whatever that final number ultimately ends up as. We know it will be in the pennies to the dollar range. The money required for payments to secured claims will have more money now that they reclassified them. It may have some small effect on the pool of money that the priority claims were to be paid out of, more money for the secured claims maybe.
Not so in the unsecured Creditor bucket of money where our Supplemental Pension claims were designated and classified to be no priority status for any Supplemental Pension Claims, they are unsecured claims.
I was told they probably will pay in installments over a period of time, which could relieve some anxiety some have had regarding tax consequences.
I was told it may take a year to pay. Some of the smaller claims could get lump sum payments. So, nothing official has been released.
It will take some time in my opinion, so probably nothing will be paid this year. Again, we all need to be patience and it will all be worked out.
The PBGC, the governmental agency, played a huge role in what happened or happens to us (retirees). The PBGC determines how both of the Salaried Pension Plan and the Represented (Union) Pension Plans were affected.
First off, the PBGC by Bankruptcy Law was our representative on the Creditors Committee. The PBGC was there because they are one of the largest secured creditors and automatically receive a seat on the Creditors Committee along with the other major secured debt holders, creditors.
Retirees are not allowed on this committee in most bankruptcies. The reason given by the courts is that the PBGC represents us. However, in many other bankruptcies cases and in ours unions are allowed to have a seat on the creditor’s committees if they petition the court for a seat. This is because they have members still employed and labor agreement contracts in force. That is a good thing. However, corporations and courts think legacy liabilities (salaried retirees) are not.
(See our latest version of the NRLN Bankruptcy White Paper that advocates Congress pass legislation needed for fairer treatment of retirees in corporate bankruptcies.
Click here: https://www.nrln.org/flyin%20whtpprs/WP.%20Protecting%20Retirees%20in%20Bankruptcy.pdf )
The PBGC and the Union Represented Creditor Committee members fought for us with the other major creditors (owners) and it was worked out that the only way Avaya could emerge from bankruptcy and be an ongoing company post-bankruptcy was a major compromise that led to the termination of the Salaried Pension Plan and the ultimate take over by the PBGC and the retaining of the Represented (Union) Pension Plan and all benefits by NewCo Avaya.
See interesting excerpts below from the attached PDF of the court document filed in court by Sharon L. Levine and Dipesh Patel, Attorneys for the Communications Workers of America. Sharon Levine was the first attorney who was referred to me in November 2016, (described to me as a “pit bull” in bankruptcies). She spent many hours providing guidance, counseling and schooling to me and a few other leaders in our Avaya Retirees Chapter months before Avaya had filed for bankruptcy early this year. She was an enormous legal help to us. Everyone in the Represented Plans (CWA and IBEW) should read the attached court document and be very thankful for her and the role her team played in the outcome.
From the attached CWA document:
4. The CWA is a labor organization whose members include both employees, current and former, and retirees of the Debtors. Not only does the CWA represent certain of the Debtors’ employees and retirees, the CWA also represents non-filed by spouses and other beneficiaries entitled to benefits under the current collective bargaining agreement with the Debtors.
5. In total, the CWA represents the interests of about 463 active workers, about 3,757 retirees who receive a pension from the Avaya Inc. Pension Plan, which remains in place under the Plan, and over 15,000 retirees, surviving spouses and dependents whose health benefits continue following confirmation of the Plan – a tremendous result following a chapter 11 process.
Statement in Support
9. The CWA supports confirmation of the Plan.
10. The Plan, if confirmed, allows the Debtors to move forward to implement their restructuring efforts. As noted above, the Plan, which has the support of the Debtors’ major financial stakeholders, (1) deleverages the Debtors’ balance sheet, (2) reorganizes and keeps intact the CWA collective bargaining agreement and provides for the continuation of the Avaya Inc. Pension Plan to the benefit of over 15,000 retirees, and (3) provides a recovery to the Debtors’ creditors. Doc 1541 Filed 11/22/17 Entered 11/22/17 16:01:36
Remember, all those have HRA OneExchange accounts, the monies have been deposited to your accounts for 2018. The bad news is you only have until tomorrow (December 7) to make any changes to your Health or Drug plans if you want to make a change.
Regards,
Vern Larson, President,
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Link to other NRLN White Papers at: https://www.nrln.org/_pvtflyin.html,
Forward to a Friend | Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Click To View Documents: CWA supports the Plan.pdf (41KB);
NRLN Avaya Retirees Chapter Updates – Dec. 5, 2017
I have been receiving numerous questions from members regarding the Court’s recent expected approval of The 2ndAmended Plan of Reorganization. What happens to us now? Well, it depends.
Key items:
The Avaya pension center will be paying the Jan 1st paychecks. Avaya is currently awaiting for the Pension Benefit Guaranty Corporation (PBGC) to set up a transition team. I have been told it sometimes takes several months for final transition over to the PBGC’s pay agent… patience is needed.
There are around 70 pensioners that will be over the PBGC maximum payouts, they will be receiving a communication informing them that their payment is being cut back to the PBGC maximums.
If a pay date is on a banking holiday, like this coming January 1st 2018, it is paid the next day. Paper checks are mailed prior to the pay date.
Supplemental Pension payouts. Show me the money!
The supplemental payout is paid on a pro rata basis, (that is proportional, in Bankruptcy the money in that pool is divided proportionately among all of the creditors in the pool. To clarify, I have not heard any official time frame as yet on when the payments will be made.
I do know they (the attorneys) have a lot a work to do before they can start paying. They will continue working on the claims, approving, disallowing and even expunging where needed. One issue is there are many supplemental claims where the person checked the box on the Proof of Claim form that stated their claim was a Priority claim. These claims were originally placed in an administrative priority bucket that could be paid out all the way up to 100%.
All of those claims needed to be culled out and reclassified as all of the unsecured supplemental claims and be paid the “Plan’s” pro rata rate, whatever that final number ultimately ends up as. We know it will be in the pennies to the dollar range. The money required for payments to secured claims will have more money now that they reclassified them. It may have some small effect on the pool of money that the priority claims were to be paid out of, more money for the secured claims maybe.
Not so in the unsecured Creditor bucket of money where our Supplemental Pension claims were designated and classified to be no priority status for any Supplemental Pension Claims, they are unsecured claims.
I was told they probably will pay in installments over a period of time, which could relieve some anxiety some have had regarding tax consequences.
I was told it may take a year to pay. Some of the smaller claims could get lump sum payments. So, nothing official has been released.
It will take some time in my opinion, so probably nothing will be paid this year. Again, we all need to be patience and it will all be worked out.
The PBGC, the governmental agency, played a huge role in what happened or happens to us (retirees). The PBGC determines how both of the Salaried Pension Plan and the Represented (Union) Pension Plans were affected.
First off, the PBGC by Bankruptcy Law was our representative on the Creditors Committee. The PBGC was there because they are one of the largest secured creditors and automatically receive a seat on the Creditors Committee along with the other major secured debt holders, creditors.
Retirees are not allowed on this committee in most bankruptcies. The reason given by the courts is that the PBGC represents us. However, in many other bankruptcies cases and in ours unions are allowed to have a seat on the creditor’s committees if they petition the court for a seat. This is because they have members still employed and labor agreement contracts in force. That is a good thing. However, corporations and courts think legacy liabilities (salaried retirees) are not.
(See our latest version of the NRLN Bankruptcy White Paper that advocates Congress pass legislation needed for fairer treatment of retirees in corporate bankruptcies.
Click here: https://www.nrln.org/flyin%20whtpprs/WP.%20Protecting%20Retirees%20in%20Bankruptcy.pdf )
The PBGC and the Union Represented Creditor Committee members fought for us with the other major creditors (owners) and it was worked out that the only way Avaya could emerge from bankruptcy and be an ongoing company post-bankruptcy was a major compromise that led to the termination of the Salaried Pension Plan and the ultimate take over by the PBGC and the retaining of the Represented (Union) Pension Plan and all benefits by NewCo Avaya.
See interesting excerpts below from the attached PDF of the court document filed in court by Sharon L. Levine and Dipesh Patel, Attorneys for the Communications Workers of America. Sharon Levine was the first attorney who was referred to me in November 2016, (described to me as a “pit bull” in bankruptcies). She spent many hours providing guidance, counseling and schooling to me and a few other leaders in our Avaya Retirees Chapter months before Avaya had filed for bankruptcy early this year. She was an enormous legal help to us. Everyone in the Represented Plans (CWA and IBEW) should read the attached court document and be very thankful for her and the role her team played in the outcome.
From the attached CWA document:
4. The CWA is a labor organization whose members include both employees, current and former, and retirees of the Debtors. Not only does the CWA represent certain of the Debtors’ employees and retirees, the CWA also represents non-filed by spouses and other beneficiaries entitled to benefits under the current collective bargaining agreement with the Debtors.
5. In total, the CWA represents the interests of about 463 active workers, about 3,757 retirees who receive a pension from the Avaya Inc. Pension Plan, which remains in place under the Plan, and over 15,000 retirees, surviving spouses and dependents whose health benefits continue following confirmation of the Plan – a tremendous result following a chapter 11 process.
Statement in Support
9. The CWA supports confirmation of the Plan.
10. The Plan, if confirmed, allows the Debtors to move forward to implement their restructuring efforts. As noted above, the Plan, which has the support of the Debtors’ major financial stakeholders, (1) deleverages the Debtors’ balance sheet, (2) reorganizes and keeps intact the CWA collective bargaining agreement and provides for the continuation of the Avaya Inc. Pension Plan to the benefit of over 15,000 retirees, and (3) provides a recovery to the Debtors’ creditors. Doc 1541 Filed 11/22/17 Entered 11/22/17 16:01:36
Remember, all those have HRA OneExchange accounts, the monies have been deposited to your accounts for 2018. The bad news is you only have until tomorrow (December 7) to make any changes to your Health or Drug plans if you want to make a change.
Regards,
Vern Larson, President,
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Link to other NRLN White Papers at: https://www.nrln.org/_pvtflyin.html,
- Pension Guarantees that Work for Retirees, A Proposal for Commonsense PBGC Reforms
- Pension Asset Protection (PAP) – Back Door Reversions
- Protecting Retiree Benefits - Pension Benefit Guaranty Corporation Rules Reform
- Protecting Retirees in Mergers, Acquisitions & Spin-offs
- Protecting Retiree Benefits in Bankruptcy
Forward to a Friend | Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: All NRLN Avaya Retirees Chapter Members.
As expected, the U.S. Bankruptcy Court has approved the latest Avaya Plan for Chapter 11 reorganization. See the announcement below.
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Avaya Announces Court Approval of Restructuring Plan – Nov. 28, 2017
Santa Clara, Calif., — November 28, 2017 — Avaya announced today that the United States Bankruptcy Court for the Southern District of New York (the “Court”) has confirmed its second amended chapter 11 plan of reorganization (the “Plan”). As a result, Avaya expects to emerge from its restructuring process before the end of this year.
“The Court’s approval of our plan is the culmination of months of hard work and extensive negotiations among our various stakeholders,” said Jim Chirico, Avaya’s President and CEO. “In the coming weeks, Avaya will emerge from this process stronger than ever and positioned for long-term success, with the financial flexibility to create even greater value for our customers, partners and stockholders.”
Avaya projects to have approximately $2.925 billion of funded debt and a $300 million senior secured asset-based lending facility available upon emergence from chapter 11 protection, a substantial reduction from the approximately $6 billion of debt on its balance sheet when Avaya commenced its financial restructuring. This revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
“I want to thank our customers and partners for their continued support,” Chirico said. “The trust and loyalty of our global customer base and partner network have played a vital role in Avaya’s success throughout this process.”
“I also want to thank our dedicated and driven employees, who have remained focused on delivering the innovative solutions and industry-leading service that our customers expect from us,” Chirico continued. “I look forward to working with our employees, customers and partners as we write the next chapter of the Avaya story.”
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the Company’s restructuring counsel.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
As expected, the U.S. Bankruptcy Court has approved the latest Avaya Plan for Chapter 11 reorganization. See the announcement below.
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Avaya Announces Court Approval of Restructuring Plan – Nov. 28, 2017
Santa Clara, Calif., — November 28, 2017 — Avaya announced today that the United States Bankruptcy Court for the Southern District of New York (the “Court”) has confirmed its second amended chapter 11 plan of reorganization (the “Plan”). As a result, Avaya expects to emerge from its restructuring process before the end of this year.
“The Court’s approval of our plan is the culmination of months of hard work and extensive negotiations among our various stakeholders,” said Jim Chirico, Avaya’s President and CEO. “In the coming weeks, Avaya will emerge from this process stronger than ever and positioned for long-term success, with the financial flexibility to create even greater value for our customers, partners and stockholders.”
Avaya projects to have approximately $2.925 billion of funded debt and a $300 million senior secured asset-based lending facility available upon emergence from chapter 11 protection, a substantial reduction from the approximately $6 billion of debt on its balance sheet when Avaya commenced its financial restructuring. This revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
“I want to thank our customers and partners for their continued support,” Chirico said. “The trust and loyalty of our global customer base and partner network have played a vital role in Avaya’s success throughout this process.”
“I also want to thank our dedicated and driven employees, who have remained focused on delivering the innovative solutions and industry-leading service that our customers expect from us,” Chirico continued. “I look forward to working with our employees, customers and partners as we write the next chapter of the Avaya story.”
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the Company’s restructuring counsel.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: All NRLN Avaya Retirees Chapter Members:
Avaya Bankruptcy Issues - Nov. 14, 2017
I have been receiving numerous calls and emails regarding new questions surrounding “The Plan” Vote and Opt-Out offer and solicitations to buy your claims.
Example of the questions received: Can you help interpret the Opt-Out form?
Here is the answer in colloquial English...and some legal language explained.
Those who received the Notice of Non-Voting Status and the Opt-Out Form: It is further notice that because of the nature and treatment of their claim under the Plan you are not entitled to vote on the plan. Because you are a holder of a Claim that is not impaired (legalese = unimpaired = not weaken or damaged) so it is conclusively presumed = (a conclusive presumption is a presumption of law that cannot be rebutted by evidence) to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. (U.S. Code › Title 11 › Chapter 11 › Subchapter II › § 1126
Acceptance of the Plan, (f) notwithstanding any other provision of this section, a class that is not impaired under a plan, and each holder of a claim or interest of such class, are conclusively presumed to have accepted the plan, and solicitation of acceptances with respect to such class from the holders of claims or interests of such class is not required.
Therefore:
If you “Opt-Out” you can still take legal action against Avaya in the future.
Which is Opt-Out of Article VIII.D (The Third Party Release)
If you do not Opt-Out, you are giving up your rights to take legal action against Avaya in the future concerning this issue.
If you do not return the form, you will still receive your distributions, and entitlements. It does not affect your pension, etc., in anyway.
All those who have received the General Unsecured Creditor Ballot (Pink Ballot) if they vote to approve the plan it will be deemed to consent to the Third-Party Release. Which is also Article VIII.D of the Plan. So, if you vote to approve the Plan, you are giving up your right to take legal action against Avaya.
Letters and emails that everyone has been receiving to buy your claims.
Avaya will not guarantee paying any unsecured claims. Unsecured claims if approved would be paid out of the unsecured bucket of money that has been allocated by the court and set aside for these claims. All unsecured claims that are deemed ultimately valid would be paid on a pro rata basis. See message below that I have sent out to others in our NRLN Avaya Retirees Chapter.
Avaya has stated in “The Plan” they have assembled estimates of all unsecured claims (which includes supplemental pension claims, that have already been deemed valid) to be approximately $305 million.
Avaya’s Reorganization Plan, if approved by the court, provides that each holder of a valid unsecured claim will receive its pro rata distribution of a $57.5 million “cash pool” that has been set aside by the court.
This amounts to only pennies on the dollar, like most bankruptcies. So to answer your question that you received a letter from Prime Shares offering to buy your $100K claim (life insurance) for $8K. You and everyone else needs to know that there are many companies out there that troll the public bankruptcy and civil lawsuits records for those that may have a need for quick cash in these litigation cases.
They have been calling and emailing Avaya Retiree members ever since Primeclerk released the first spreadsheet listing of the 830 names of us who had filed our Proof of Claims for our Supplemental Pensions earlier in the year, and more recently now, since it appears that the Avaya Bankruptcy end is near if The Plan is approved. They started again in September soliciting others that have claims filed for possible loss of Life Insurance, Health Accounts, etc., going forward.
We discussed this issue with our attorney early in the year regarding these solicitations. These firms offer to buy claims and give a creditor a discounted value in advance of the final settlement.
There are usually terms that protect the firm and obligate the creditor (us) should the final claim come in lower than the expected settlement used as the basis for the buyout.
Since many of these claims are for possible loss of Life Insurance, OneExchange deposits for Health Insurance, etc. that will ultimately be disallowed and expunged because it will be a moot point since Avaya has stated all along that it will continue paying for these benefits. Also, it states in “The Plan”’ Page 60 “The Disclosure Statement” that accompanied the Pink Ballots states on Page 36 that Avaya will continue to maintain the OPEB’s (Other Pension Employee Benefits) in accordance with and subject to, their terms and applicable non-bankruptcy laws. But, they add, or could, Modify OPEB’s in compliance with applicable Non-Bankruptcy law and the Reorganized Debtors (NewCo Avaya) reserve all of their rights thereunder… So, in the future they still could discontinue paying for our life insurance and state something like this, for the needs of the business we will no longer be able to maintain the such and such… with the proper notice of 60 or 90 days whatever is required. Of course, this will be outside of Bankruptcy.
I would personally not accept any offers like these that are being sent out to buy your claim.
I say caveat emptor.
If you have any further concerns or questions let me know.
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: VernLarson@cox.net
Phone: 402-203-6899
Avaya Bankruptcy Issues - Nov. 14, 2017
I have been receiving numerous calls and emails regarding new questions surrounding “The Plan” Vote and Opt-Out offer and solicitations to buy your claims.
Example of the questions received: Can you help interpret the Opt-Out form?
Here is the answer in colloquial English...and some legal language explained.
Those who received the Notice of Non-Voting Status and the Opt-Out Form: It is further notice that because of the nature and treatment of their claim under the Plan you are not entitled to vote on the plan. Because you are a holder of a Claim that is not impaired (legalese = unimpaired = not weaken or damaged) so it is conclusively presumed = (a conclusive presumption is a presumption of law that cannot be rebutted by evidence) to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. (U.S. Code › Title 11 › Chapter 11 › Subchapter II › § 1126
Acceptance of the Plan, (f) notwithstanding any other provision of this section, a class that is not impaired under a plan, and each holder of a claim or interest of such class, are conclusively presumed to have accepted the plan, and solicitation of acceptances with respect to such class from the holders of claims or interests of such class is not required.
Therefore:
If you “Opt-Out” you can still take legal action against Avaya in the future.
Which is Opt-Out of Article VIII.D (The Third Party Release)
If you do not Opt-Out, you are giving up your rights to take legal action against Avaya in the future concerning this issue.
If you do not return the form, you will still receive your distributions, and entitlements. It does not affect your pension, etc., in anyway.
All those who have received the General Unsecured Creditor Ballot (Pink Ballot) if they vote to approve the plan it will be deemed to consent to the Third-Party Release. Which is also Article VIII.D of the Plan. So, if you vote to approve the Plan, you are giving up your right to take legal action against Avaya.
Letters and emails that everyone has been receiving to buy your claims.
Avaya will not guarantee paying any unsecured claims. Unsecured claims if approved would be paid out of the unsecured bucket of money that has been allocated by the court and set aside for these claims. All unsecured claims that are deemed ultimately valid would be paid on a pro rata basis. See message below that I have sent out to others in our NRLN Avaya Retirees Chapter.
Avaya has stated in “The Plan” they have assembled estimates of all unsecured claims (which includes supplemental pension claims, that have already been deemed valid) to be approximately $305 million.
Avaya’s Reorganization Plan, if approved by the court, provides that each holder of a valid unsecured claim will receive its pro rata distribution of a $57.5 million “cash pool” that has been set aside by the court.
This amounts to only pennies on the dollar, like most bankruptcies. So to answer your question that you received a letter from Prime Shares offering to buy your $100K claim (life insurance) for $8K. You and everyone else needs to know that there are many companies out there that troll the public bankruptcy and civil lawsuits records for those that may have a need for quick cash in these litigation cases.
They have been calling and emailing Avaya Retiree members ever since Primeclerk released the first spreadsheet listing of the 830 names of us who had filed our Proof of Claims for our Supplemental Pensions earlier in the year, and more recently now, since it appears that the Avaya Bankruptcy end is near if The Plan is approved. They started again in September soliciting others that have claims filed for possible loss of Life Insurance, Health Accounts, etc., going forward.
We discussed this issue with our attorney early in the year regarding these solicitations. These firms offer to buy claims and give a creditor a discounted value in advance of the final settlement.
There are usually terms that protect the firm and obligate the creditor (us) should the final claim come in lower than the expected settlement used as the basis for the buyout.
Since many of these claims are for possible loss of Life Insurance, OneExchange deposits for Health Insurance, etc. that will ultimately be disallowed and expunged because it will be a moot point since Avaya has stated all along that it will continue paying for these benefits. Also, it states in “The Plan”’ Page 60 “The Disclosure Statement” that accompanied the Pink Ballots states on Page 36 that Avaya will continue to maintain the OPEB’s (Other Pension Employee Benefits) in accordance with and subject to, their terms and applicable non-bankruptcy laws. But, they add, or could, Modify OPEB’s in compliance with applicable Non-Bankruptcy law and the Reorganized Debtors (NewCo Avaya) reserve all of their rights thereunder… So, in the future they still could discontinue paying for our life insurance and state something like this, for the needs of the business we will no longer be able to maintain the such and such… with the proper notice of 60 or 90 days whatever is required. Of course, this will be outside of Bankruptcy.
I would personally not accept any offers like these that are being sent out to buy your claim.
I say caveat emptor.
If you have any further concerns or questions let me know.
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: VernLarson@cox.net
Phone: 402-203-6899
To: NRLN Avaya Retirees Chapter Members
Subject: Avaya Holdings Announcement and Other Items
Santa Clara, CA — Nov. 10, 2017 – Avaya Holdings announced today that its wholly-owned subsidiary, Avaya Inc., has successfully priced a $2.925 billion senior secured term loan, which was upsized from $2.425 billion, in response to strong market demand.
The term loan results in a simplified, single-tranche long-term debt capitalization structure upon emergence at a level consistent with the total debt structure contemplated by Avaya’s Plan of Reorganization.
“The successful upsize and pricing of this senior secured term loan is a very important step in our emergence from chapter 11, simplifies our capital structure, and strengthens Avaya’s ability to pursue future growth opportunities,” said Jim Chirico, Avaya’s President and Chief Executive Officer.
The revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
The term loan will mature in 2024 and bear interest at a rate of LIBOR plus 4.75% per annum, with a 1.00% LIBOR floor. The facility is being arranged by Goldman Sachs Bank USA as administrative agent, syndication agent, joint lead arranger and joint bookrunner, as well as Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. as joint lead arrangers and joint bookrunners. Centerview Partners LLC and Zolfo Cooper LLC are Avaya's financial and restructuring advisors and Kirkland & Ellis LLP is Avaya’s restructuring counsel.
A hearing to consider confirmation of Avaya’s Plan of Reorganization is scheduled to commence on November 28, 2017. The funding and closing of the term loan is expected to occur in December 2017, concurrent with the anticipated effective date of Avaya’s Plan of Reorganization. The proceeds from the term loan will be used to support Avaya’s emergence from chapter 11.
Single-Tranche - English translation for non-accountants below:
“In structured finance, a tranche is one of a number of related securities offered as part of the same transaction. The word tranche is French for slice, section, series, or portion, and is cognate to English trench ('ditch'). In the financial sense of the word, each bond is a different slice of the deal's risk. Transaction documentation (see indenture) usually defines the tranches as different "classes" of notes, each identified by letter (e.g., the Class A, Class B, Class C securities) with different bond credit ratings (ratings).
The term tranche is used in fields of finance other than structured finance (such as in straight lending, where multi-tranche loans are commonplace), but the term's use in structured finance may be singled out as particularly important. Use of "tranche" as a verb is limited almost exclusively to this field.”
Other Items
Avaya Offers Buy-Out to Union Craft Techs
I have received several calls regarding a recent Avaya offer of a buy-out offered to Union Craft Techs…two years pay, etc. Pension’s and benefits...
Avaya Benefits stated to me that it is just a normal small voluntary offer for that job class that we have from time to time, nothing out of the ordinary.
Impacted employees get a communication package outlining their severance under the collective bargaining agreement.
The two years is probably a reference to the severance pay for high seniority employees.
Voting Deadline 11/27/17 for Second Amended Joint Chapter 11 Plan
The voting for the Second Amended Joint Chapter 11 Plan for Reorganization is under way and the voting deadline is November 27, 2017. You can vote painlessly online at Primeclerk,
Visit. https://cases.primeclerk.com/avaya, click on Submit E-Ballot section on the website, you will need your unique E-Ballot ID# xxxxxxxxxxxxxxx to vote.
I have also had many calls from members that received the “Notice of Non-Voting Status and Opt-Out Form for Holders of Unimpaired Claims Conclusively Presumed to Accept the Plan”
Another Legalese Translation to English. The Opt-Out Form provides you the voluntary option to not grant releases to the debtor, meaning once the plan of reorganization effectuates, all rights to participate in taking further potential legal action against the company are automatically released by the claimants, unless you opt out.
Simply put, if you “opt out”, you retain the right to do so. ” Also, If you do not return the form, you will still receive your distributions, and entitlements. It does not affect your pension, etc., in anyway.
Opting out is your choice. It was suggested that I ought not give advice whether or not you should do so. You may want to consult with your financial advisor in that regard.
All Legacy Liabilities please hang in there, the end is approaching.
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Subject: Avaya Holdings Announcement and Other Items
Santa Clara, CA — Nov. 10, 2017 – Avaya Holdings announced today that its wholly-owned subsidiary, Avaya Inc., has successfully priced a $2.925 billion senior secured term loan, which was upsized from $2.425 billion, in response to strong market demand.
The term loan results in a simplified, single-tranche long-term debt capitalization structure upon emergence at a level consistent with the total debt structure contemplated by Avaya’s Plan of Reorganization.
“The successful upsize and pricing of this senior secured term loan is a very important step in our emergence from chapter 11, simplifies our capital structure, and strengthens Avaya’s ability to pursue future growth opportunities,” said Jim Chirico, Avaya’s President and Chief Executive Officer.
The revised capital structure is expected to result in more than $200 million in annual cash interest savings compared to fiscal year 2016.
The term loan will mature in 2024 and bear interest at a rate of LIBOR plus 4.75% per annum, with a 1.00% LIBOR floor. The facility is being arranged by Goldman Sachs Bank USA as administrative agent, syndication agent, joint lead arranger and joint bookrunner, as well as Citigroup Global Markets Inc., Barclays Bank PLC, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. as joint lead arrangers and joint bookrunners. Centerview Partners LLC and Zolfo Cooper LLC are Avaya's financial and restructuring advisors and Kirkland & Ellis LLP is Avaya’s restructuring counsel.
A hearing to consider confirmation of Avaya’s Plan of Reorganization is scheduled to commence on November 28, 2017. The funding and closing of the term loan is expected to occur in December 2017, concurrent with the anticipated effective date of Avaya’s Plan of Reorganization. The proceeds from the term loan will be used to support Avaya’s emergence from chapter 11.
Single-Tranche - English translation for non-accountants below:
“In structured finance, a tranche is one of a number of related securities offered as part of the same transaction. The word tranche is French for slice, section, series, or portion, and is cognate to English trench ('ditch'). In the financial sense of the word, each bond is a different slice of the deal's risk. Transaction documentation (see indenture) usually defines the tranches as different "classes" of notes, each identified by letter (e.g., the Class A, Class B, Class C securities) with different bond credit ratings (ratings).
The term tranche is used in fields of finance other than structured finance (such as in straight lending, where multi-tranche loans are commonplace), but the term's use in structured finance may be singled out as particularly important. Use of "tranche" as a verb is limited almost exclusively to this field.”
Other Items
Avaya Offers Buy-Out to Union Craft Techs
I have received several calls regarding a recent Avaya offer of a buy-out offered to Union Craft Techs…two years pay, etc. Pension’s and benefits...
Avaya Benefits stated to me that it is just a normal small voluntary offer for that job class that we have from time to time, nothing out of the ordinary.
Impacted employees get a communication package outlining their severance under the collective bargaining agreement.
The two years is probably a reference to the severance pay for high seniority employees.
Voting Deadline 11/27/17 for Second Amended Joint Chapter 11 Plan
The voting for the Second Amended Joint Chapter 11 Plan for Reorganization is under way and the voting deadline is November 27, 2017. You can vote painlessly online at Primeclerk,
Visit. https://cases.primeclerk.com/avaya, click on Submit E-Ballot section on the website, you will need your unique E-Ballot ID# xxxxxxxxxxxxxxx to vote.
I have also had many calls from members that received the “Notice of Non-Voting Status and Opt-Out Form for Holders of Unimpaired Claims Conclusively Presumed to Accept the Plan”
Another Legalese Translation to English. The Opt-Out Form provides you the voluntary option to not grant releases to the debtor, meaning once the plan of reorganization effectuates, all rights to participate in taking further potential legal action against the company are automatically released by the claimants, unless you opt out.
Simply put, if you “opt out”, you retain the right to do so. ” Also, If you do not return the form, you will still receive your distributions, and entitlements. It does not affect your pension, etc., in anyway.
Opting out is your choice. It was suggested that I ought not give advice whether or not you should do so. You may want to consult with your financial advisor in that regard.
All Legacy Liabilities please hang in there, the end is approaching.
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Another new Amended Plan.
Avaya Announces Global Resolution in Chapter 11 Restructuring - 24 Oct 2017
Has Filed Second Amended Plan of Reorganization
Supported by all Major Creditor Groups
Launches Exit Financing Process with Approximately $3 Billion in Commitments Secured
Remains on Track to Emerge in 2017
Santa Clara, Calif., — October 24, 2017 – Avaya announced today that it has reached global consensus (the “Global Resolution”) regarding the terms of a chapter 11 plan with its major creditors, including the Ad Hoc Group of First Lien Creditors (the “First Lien Group”), the Ad Hoc Group of Crossover Creditors (the “Crossover Group”), the Official Committee of Unsecured Creditors (the “Creditors’ Committee”), and Pension Benefit Guaranty Corporation (“PBGC”). As a result of the Global Resolution, Avaya has filed a Second Amended Plan of Reorganization (the “Second Amended Plan”) which, among other things: (a) increases recovery for holders of Second Lien Notes Claims to 4.0% of Reorganized HoldCo Common Stock, and distributes warrants for an additional 5.0% of Reorganized HoldCo Common Stock to holders of Second Lien Notes Claims; (b) reduces the distribution of Reorganized HoldCo Common Stock to holders of First Lien Debt from 91.5% to 90.5%; (c) increases PBGC’s proposed cash recovery from $300 million to $340 million and reduces PBGC’s recovery in the form of Reorganized HoldCo Common Stock from 7.5% to 5.5%; and (d) reduces recoveries available to holders of General Unsecured Claims to $57.5 million. Avaya has also entered into a plan support agreement with members of the Crossover Group. As a result, the Second Amended Plan is now supported by holders of more than two-thirds of Avaya’s First Lien Debt and more than two-thirds of Avaya’s Second Lien Notes.
Avaya has also filed a Disclosure Statement Supplement and, subject to customary approvals, will distribute that supplement to voting creditors. Additionally, Avaya has filed a request for an updated confirmation schedule to accommodate this resolution. Subject to those approvals, including confirmation of the Second Amended Plan, Avaya expects to complete its restructuring and emerge from chapter 11 protection in 2017.
Avaya also announced today that it is launching an exit financing process secured by fully underwritten commitments. Subject to Bankruptcy Court approval, these commitments include $2.925 billion of funded debt, including a $2.425 billion term loan underwritten by a group of banks led by Goldman, Sachs & Co. and Citibank, N.A.
Avaya projects to have $2.925 billion of funded debt and a $300 million senior secured asset-based lending (ABL) facility available upon emergence from bankruptcy, a substantial reduction from the approximately $6 billion of debt on its balance sheet when Avaya commenced its financial restructuring. This revised capital structure is expected to save Avaya more than $200 million in annual interest expense compared to fiscal year 2016. The debt restructuring will also provide Avaya with longer dated debt maturities and improve its ability to pursue future growth opportunities as it emerges as a public company.
“The Global Resolution is one of the most significant milestones in our chapter 11 process, and we are pleased to have gained the Crossover Group’s support for the Second Amended Plan,” said Jim Chirico, Avaya’s President and Chief Executive Officer. “It was our goal all along to reach a Plan of Reorganization that is fully supported by all of our major creditor groups. With a consensus?backed Plan and exit financing commitments in hand, we are closer than ever to emerging as a stronger, more competitive company. These developments are good news not only for Avaya, but for our customers and partners as well.”
This press release is not intended as solicitation for a vote on the Second Amended Plan, and nothing herein is or should be considered a solicitation of votes for the acceptance of the Second Amended Plan or any Plan of Reorganization for the purposes of Bankruptcy Code sections 1125 and 1126 or otherwise. The full terms of the Second Amended Plan and revised Disclosure Statement, as well as the related pleadings, are available online at: https://cases.primeclerk.com/avaya.
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the company’s restructuring counsel.
The First Lien Group is represented by Akin Gump Strauss Hauer & Feld LLP and PJT Partners LP, as legal and financial advisors, respectively.
The Crossover Group is represented by Stroock & Stroock & Lavan LLP and Rothschild Inc., as legal and financial advisors, respectively.
The Creditors’ Committee is represented by Morrison & Foerster LLP, Jefferies LLC, and Alvarez & Marsal North America, LLC, as legal, financial, and restructuring advisors, respectively.
PBGC is represented by Dentons US LLP and FTI Consulting, as legal and financial advisors, respectively.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Avaya Announces Global Resolution in Chapter 11 Restructuring - 24 Oct 2017
Has Filed Second Amended Plan of Reorganization
Supported by all Major Creditor Groups
Launches Exit Financing Process with Approximately $3 Billion in Commitments Secured
Remains on Track to Emerge in 2017
Santa Clara, Calif., — October 24, 2017 – Avaya announced today that it has reached global consensus (the “Global Resolution”) regarding the terms of a chapter 11 plan with its major creditors, including the Ad Hoc Group of First Lien Creditors (the “First Lien Group”), the Ad Hoc Group of Crossover Creditors (the “Crossover Group”), the Official Committee of Unsecured Creditors (the “Creditors’ Committee”), and Pension Benefit Guaranty Corporation (“PBGC”). As a result of the Global Resolution, Avaya has filed a Second Amended Plan of Reorganization (the “Second Amended Plan”) which, among other things: (a) increases recovery for holders of Second Lien Notes Claims to 4.0% of Reorganized HoldCo Common Stock, and distributes warrants for an additional 5.0% of Reorganized HoldCo Common Stock to holders of Second Lien Notes Claims; (b) reduces the distribution of Reorganized HoldCo Common Stock to holders of First Lien Debt from 91.5% to 90.5%; (c) increases PBGC’s proposed cash recovery from $300 million to $340 million and reduces PBGC’s recovery in the form of Reorganized HoldCo Common Stock from 7.5% to 5.5%; and (d) reduces recoveries available to holders of General Unsecured Claims to $57.5 million. Avaya has also entered into a plan support agreement with members of the Crossover Group. As a result, the Second Amended Plan is now supported by holders of more than two-thirds of Avaya’s First Lien Debt and more than two-thirds of Avaya’s Second Lien Notes.
Avaya has also filed a Disclosure Statement Supplement and, subject to customary approvals, will distribute that supplement to voting creditors. Additionally, Avaya has filed a request for an updated confirmation schedule to accommodate this resolution. Subject to those approvals, including confirmation of the Second Amended Plan, Avaya expects to complete its restructuring and emerge from chapter 11 protection in 2017.
Avaya also announced today that it is launching an exit financing process secured by fully underwritten commitments. Subject to Bankruptcy Court approval, these commitments include $2.925 billion of funded debt, including a $2.425 billion term loan underwritten by a group of banks led by Goldman, Sachs & Co. and Citibank, N.A.
Avaya projects to have $2.925 billion of funded debt and a $300 million senior secured asset-based lending (ABL) facility available upon emergence from bankruptcy, a substantial reduction from the approximately $6 billion of debt on its balance sheet when Avaya commenced its financial restructuring. This revised capital structure is expected to save Avaya more than $200 million in annual interest expense compared to fiscal year 2016. The debt restructuring will also provide Avaya with longer dated debt maturities and improve its ability to pursue future growth opportunities as it emerges as a public company.
“The Global Resolution is one of the most significant milestones in our chapter 11 process, and we are pleased to have gained the Crossover Group’s support for the Second Amended Plan,” said Jim Chirico, Avaya’s President and Chief Executive Officer. “It was our goal all along to reach a Plan of Reorganization that is fully supported by all of our major creditor groups. With a consensus?backed Plan and exit financing commitments in hand, we are closer than ever to emerging as a stronger, more competitive company. These developments are good news not only for Avaya, but for our customers and partners as well.”
This press release is not intended as solicitation for a vote on the Second Amended Plan, and nothing herein is or should be considered a solicitation of votes for the acceptance of the Second Amended Plan or any Plan of Reorganization for the purposes of Bankruptcy Code sections 1125 and 1126 or otherwise. The full terms of the Second Amended Plan and revised Disclosure Statement, as well as the related pleadings, are available online at: https://cases.primeclerk.com/avaya.
Centerview Partners LLC and Zolfo Cooper LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the company’s restructuring counsel.
The First Lien Group is represented by Akin Gump Strauss Hauer & Feld LLP and PJT Partners LP, as legal and financial advisors, respectively.
The Crossover Group is represented by Stroock & Stroock & Lavan LLP and Rothschild Inc., as legal and financial advisors, respectively.
The Creditors’ Committee is represented by Morrison & Foerster LLP, Jefferies LLC, and Alvarez & Marsal North America, LLC, as legal, financial, and restructuring advisors, respectively.
PBGC is represented by Dentons US LLP and FTI Consulting, as legal and financial advisors, respectively.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: NRLN Avaya Retirees Chapter Members October 11, 2017
Hello Avaya Chapter members, or maybe I should say: Hello legacy liabilities.
It is sad that after all our years of faithful service we end up in the eyes of Avaya and the current Avaya owners the main secured creditors as legacy liabilities.
See the message below:
BankruptcyData
a division of new generation research
Avaya Settlement Approval Sought
“Avaya filed with the U.S. Bankruptcy Court a motion seeking entry of an order
(a) approving a settlement with Pension Benefit Guaranty Corporation (PBGC) and
(b) making the determination required for distress termination of the Avaya Pension Plan for the salaried employees.
The motion notes, "The treatment of the Avaya Pension Plan for Salaried Employees (the 'Salaried Pension Plan') and the Avaya Pension Plan (the 'Hourly Pension Plan,' and with the Salaried Pension Plan, the 'U.S. Qualified Pension Plans') has remained a critical item for the Debtors' creditor groups.
In particular, each of the Ad Hoc First Lien Group and the Ad Hoc Crossover Group (together, the 'Ad Hoc Creditor Groups') have made clear that their support for any restructuring plan would be conditioned on the Debtors also obtaining material concessions with respect to their legacy liabilities - and the Salaried Pension Plan, in particular….
The Stipulation of Settlement also settles the $1.2 billion of asserted claims resulting from the termination of the Salaried Plan on terms that significantly aid the Debtors' reorganization efforts without prolonged litigation."
The motion continues, "The Stipulation of Settlement resolves the resulting liabilities against the controlled group by providing for a cash distribution of $300 million and the issuance to PBGC of 7.5% of the equity of the Reorganized Debtors upon the Effective Date of the Debtors' Amended Plan….
The Stipulation of Settlement also provides that the Reorganized Debtors will continue to sponsor the Hourly Pension Plan with certain additional post-emergence protections. Those protections may require the Reorganized Debtors to contribute up to $150 million to the Hourly Pension Plan on a post-Effective Date basis in connection with the occurrence of certain 'Material Transactions.'" The Court scheduled a November 15, 2017 hearing to consider the motion, with objections due by November 1, 2017.”
Other News:
We have about 2 weeks remaining to cast our votes to accept or reject the First Amended Joint Chapter 11 plan, the Pink Ballots must be completed executed and delivered before the Voting Deadline to the Notice and Claims Agent before 5 PM prevailing Eastern Time. If you mail your ballot you can use the pre-paid enclosed envelope.
Many of us have received objections to some of our claims for various reasons, amended claims that were subsequently filed is one that many have received because they disallowed and expunged the first claim and left the amended surviving claim in place.
Stay tuned for many more claims being disallowed because Avaya and the First Amended Plan still states and was also affirmed this week by one of the Avaya Kirkland and Ellis Bankruptcy attorneys that if the Plan is ultimately approved in court they, Avaya Reorganized (the Debtors), will maintain the OPEB’s (Other Pension Employee Benefits) in accordance with, and subject to, their terms and applicable non-bankruptcy law, or even modify the OPEB’s in compliance with applicable non-bankruptcy law and the Reorganized Debtors reserve all of their rights thereunder.
As I see this, it means the company can also modify the Benefits as long as they follow non-bankruptcy laws after they emerge out of bankruptcy. I would expect that if they retain the present benefits, including Life Insurance. Then all of claims for possible loss of life insurance will be a moot point and disallowed. This helps cleaning up the docket to exit bankruptcy.
Open Enrollment Reminder for Hourly Represented Employees
Also, Avaya sent out information yesterday regarding Represented Retiree 2018 Annual Enrollment. This reminder is for all AVAYA Retiree Hourly Represented Employees.
Open enrollment started today October 11 and ends on October 24, 2017 with an effective date of changes will occur January 1, 2018.
Review the 2018 Avaya Annual Enrollment Guide available on the Avaya Benefit Enrollment Website https://my.adp.com under forms and plan documents. You and your family should review and make any changes if needed to your dental benefits for 2018 by October 24, 2017.
Your current 2017 dental elections will carry over into 2018 if you do not make changes during this Annual Enrollment.
Review and update your life insurance beneficiary if needed.
Any questions contact the Avaya Health & Benefits Decision Center at 1-800-526-8056 or via email at avayaservicecenter@adp.com.
One Exchange will mail out separate Open Enrollment materials regarding your 2018 medical and prescription drug options. These programs are not part of the Avaya Annual Enrollment.
Chapter Is Here To Serve You
The Avaya Retirees Chapter of the National Retiree Legislative Network is here to serve as your voice on the protection of our pensions, benefits and other retirement security issues.
Vern Larson, President, NRLN Avaya Retirees Chapter.
Phone: 402-203-6899,
Email vernlarson@cox.net
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Hello Avaya Chapter members, or maybe I should say: Hello legacy liabilities.
It is sad that after all our years of faithful service we end up in the eyes of Avaya and the current Avaya owners the main secured creditors as legacy liabilities.
See the message below:
BankruptcyData
a division of new generation research
Avaya Settlement Approval Sought
“Avaya filed with the U.S. Bankruptcy Court a motion seeking entry of an order
(a) approving a settlement with Pension Benefit Guaranty Corporation (PBGC) and
(b) making the determination required for distress termination of the Avaya Pension Plan for the salaried employees.
The motion notes, "The treatment of the Avaya Pension Plan for Salaried Employees (the 'Salaried Pension Plan') and the Avaya Pension Plan (the 'Hourly Pension Plan,' and with the Salaried Pension Plan, the 'U.S. Qualified Pension Plans') has remained a critical item for the Debtors' creditor groups.
In particular, each of the Ad Hoc First Lien Group and the Ad Hoc Crossover Group (together, the 'Ad Hoc Creditor Groups') have made clear that their support for any restructuring plan would be conditioned on the Debtors also obtaining material concessions with respect to their legacy liabilities - and the Salaried Pension Plan, in particular….
The Stipulation of Settlement also settles the $1.2 billion of asserted claims resulting from the termination of the Salaried Plan on terms that significantly aid the Debtors' reorganization efforts without prolonged litigation."
The motion continues, "The Stipulation of Settlement resolves the resulting liabilities against the controlled group by providing for a cash distribution of $300 million and the issuance to PBGC of 7.5% of the equity of the Reorganized Debtors upon the Effective Date of the Debtors' Amended Plan….
The Stipulation of Settlement also provides that the Reorganized Debtors will continue to sponsor the Hourly Pension Plan with certain additional post-emergence protections. Those protections may require the Reorganized Debtors to contribute up to $150 million to the Hourly Pension Plan on a post-Effective Date basis in connection with the occurrence of certain 'Material Transactions.'" The Court scheduled a November 15, 2017 hearing to consider the motion, with objections due by November 1, 2017.”
Other News:
We have about 2 weeks remaining to cast our votes to accept or reject the First Amended Joint Chapter 11 plan, the Pink Ballots must be completed executed and delivered before the Voting Deadline to the Notice and Claims Agent before 5 PM prevailing Eastern Time. If you mail your ballot you can use the pre-paid enclosed envelope.
Many of us have received objections to some of our claims for various reasons, amended claims that were subsequently filed is one that many have received because they disallowed and expunged the first claim and left the amended surviving claim in place.
Stay tuned for many more claims being disallowed because Avaya and the First Amended Plan still states and was also affirmed this week by one of the Avaya Kirkland and Ellis Bankruptcy attorneys that if the Plan is ultimately approved in court they, Avaya Reorganized (the Debtors), will maintain the OPEB’s (Other Pension Employee Benefits) in accordance with, and subject to, their terms and applicable non-bankruptcy law, or even modify the OPEB’s in compliance with applicable non-bankruptcy law and the Reorganized Debtors reserve all of their rights thereunder.
As I see this, it means the company can also modify the Benefits as long as they follow non-bankruptcy laws after they emerge out of bankruptcy. I would expect that if they retain the present benefits, including Life Insurance. Then all of claims for possible loss of life insurance will be a moot point and disallowed. This helps cleaning up the docket to exit bankruptcy.
Open Enrollment Reminder for Hourly Represented Employees
Also, Avaya sent out information yesterday regarding Represented Retiree 2018 Annual Enrollment. This reminder is for all AVAYA Retiree Hourly Represented Employees.
Open enrollment started today October 11 and ends on October 24, 2017 with an effective date of changes will occur January 1, 2018.
Review the 2018 Avaya Annual Enrollment Guide available on the Avaya Benefit Enrollment Website https://my.adp.com under forms and plan documents. You and your family should review and make any changes if needed to your dental benefits for 2018 by October 24, 2017.
Your current 2017 dental elections will carry over into 2018 if you do not make changes during this Annual Enrollment.
Review and update your life insurance beneficiary if needed.
Any questions contact the Avaya Health & Benefits Decision Center at 1-800-526-8056 or via email at avayaservicecenter@adp.com.
One Exchange will mail out separate Open Enrollment materials regarding your 2018 medical and prescription drug options. These programs are not part of the Avaya Annual Enrollment.
Chapter Is Here To Serve You
The Avaya Retirees Chapter of the National Retiree Legislative Network is here to serve as your voice on the protection of our pensions, benefits and other retirement security issues.
Vern Larson, President, NRLN Avaya Retirees Chapter.
Phone: 402-203-6899,
Email vernlarson@cox.net
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
received on September 20, 2017
Click To View Documents: Avaya Retirees Chapter Email Bankruptcy Whitepaper Revised Sept 2017 Final.pdf (556KB); Avaya Retirees Chapter Email Bankruptcy Reforms Needed to Protect Retirees Exec Summary.pdf (149KB); Avaya Retirees Chapter Email Talking Points Protecting Retirees in Bankruptcy.pdf (460KB); Avaya Retirees Chapter Email Avaya Q3FY17 Updated Financials-Sep 15 2017.pdf (563KB);
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: A Few Items of Interest
At the National Retiree Legislative Network (NRLN) Annual Fall Fly-In to Washington, DC September 11 – 13, Chapter and Association leaders introduced several major NRLN agenda items in meetings with Representatives, Senators and staffs. Among them, suggested legislation to preserve Social Security and Medicare, protect retirement income and attack high prescription drug prices as well as the attached recently revised Bankruptcy whitepaper, executive summary and talking points seeking some important tweaks to bankruptcy law. Avaya’s bankruptcy issues are sited in the position papers.
The recent Avaya financial results: PDF of Avaya results are also attached.
Avaya continues to reflect reduced sales and increased expenses. The cumulative for the past three quarters reflect a loss of $ 254 million or a quarter of a billion dollars. The balance sheet reflects current liabilities of $1.8 Billion dollars. But $8.7 Billion has been moved to chapter 11 resolution.
We are currently voting on that resolution but we have no idea what the debt level will look like when that is completed.
The results do reflect a pension liability of $563 million which is down from $1.7 billion. Is this $563 million the payment required to move the Management Pensions to PGBC? This is not what had been reported before.
For me, I am personally voting for the resolution but the vote is only to approve or reject the company plan. Item 1 on the unsecured creditor ballot pink sheets lists the voting amount.
It does not say that you have a rightful claim for that amount. In fact it says in many different ways that you may be entitled to nothing but because you filed a claim you can vote.
https://www.avaya.com/investors/usa/document/avaya-q3fy17-updated-financials
Another court ruling that we have been waiting for was entered September 18, 2017.
From: Catherine L Steege
To: 'Vern Larson' <vernlarson@cox.net,
September 18, 2017
The following is a synopsis on the Judge’s ruling denying Marlene Clark’s motion for a retiree committee:
This afternoon, Judge Stuart Bernstein entered an opinion denying the appointment of a retiree committee and ruling that the benefits being received by Marlene Clark, the surviving spouse of an Avaya former employee/retiree, are not “retiree benefits” under section 1114 of the Bankruptcy Code. Clark moved for the creation of a retiree committee, and a number of parties objected, including the debtors, the first lien ad hoc group, the crossover ad hoc group and the unsecured creditors committee.
In today’s ruling, Judge Bernstein notes the special protections afforded to “retiree benefits” under section 1114 and the “universal agreement” that pension payments are not typically treated as such “retiree benefits.” Today’s ruling addresses and rejects Clark’s argument that because she now receives the benefits on account of her late husband’s death, this implicates the statutory text of section 1114 related to “benefits in the event of … death.” Judge Bernstein holds that a death benefit does not convert a pension payment into a “retiree benefit” in this and other chapter 11 cases.
Judge Bernstein’s opinion first addresses the meaning of section 1114 of the Bankruptcy Code under which the term “retiree benefits” is defined as follows:
“Payments to any entity or person for the purpose of providing or reimbursing payments for retired employees and their spouses and dependents, for medical, surgical, or hospital care benefits, or benefits in the event of sickness, accident, disability or death under any plan, fund, or program (through the purchase of insurance or otherwise) maintained or established in whole or in part by the debtor prior to filing a petition commencing a case under this title.”
Section 1114 of the Bankruptcy Code does not protect pension benefits and would not have protected Mr. Clark’s minimum retirement benefit even if he were still alive, Judge Bernstein rules. The phrase “benefits in the event of ... death” under section 1114 is “facially ambiguous” because both sides have “supplied reasonable interpretations,” the opinion adds. As argued by Clark, the surviving spouse’s right to receive the benefit comes after the death of the retiree occurs, which suggests that it is a “benefit in the event of death.” From the other point of view, of the objectors, the benefit in the form of the minimum retirement benefit pre-exists the retiree’s death and is not a retiree benefit when it is payable to the retiree. The objectors argue that the “only thing that death triggers is a transfer of the retiree’s right to receive deferred compensation to his surviving spouse,” the judge observes.
Seeing no clear statutory interpretation canon that can resolve the issue, the judge looks to the legislative history of section 1114 and notes various sources that speak to its purpose as addressing health, life and disability insurance benefits.
Ultimately, the judge concludes that the survivor benefit that is payable to Clark is based on her right to receive Mr. Clark’s deferred compensation, his pension and the “survivorship of the debtors’ obligation” to make those payments, but “does not transmute a pension payment into a “retiree benefit” protected by section 1114, the judge holds. Here he cites to various analogous cases that rejected expanding the scope of section 1114 and concludes that Clark has not adequately distinguished those cases.
Judge Bernstein next addresses Clark’s argument that the court should look to ERISA to determine the scope of “retiree benefits” under section 1114(a) and her position that the Third Circuit’s decision in Lucent collaterally estops the debtors from asserting that the survivor benefit is not a welfare plan within the meaning of ERISA (and therefore not a “retiree benefit” within the meaning of the Bankruptcy Code). Clark had asserted that the court should look to ERISA to determine the scope of “retiree benefits” under section 1114(a) because its language tracks the definition of “welfare plan” under ERISA.
Judge Bernstein first notes that Clark waived the argument with respect to the Lucent case because she raised it for the first time in her reply brief. Moreover, he concludes that the debtors are not bound to follow Lucent because they were not “parties or in privity with parties to the Lucent litigation,” as they were spun off from Lucent prior to the lawsuit’s commencement in 2003.
Judge Bernstein further holds that Clark has failed to demonstrate that “the characteristics of the Death Benefit that drove the Lucent decision are present in the Survivor Benefit.” Unlike the death benefit in Lucent, the Avaya survivor benefit is related to the annual payments of accrued deferred compensation otherwise payable to the retiree and is directly tied to the eligibility for retirement payments under the supplemental plan, Judge Bernstein notes. In addition, the goals of bankruptcy weigh against applying the Lucent decision to the instant case, as it cuts against the “principle that preferential treatment of a class of creditors is in order only when clearly authorized by Congress,” says the judge.
At a hearing on May 25, Judge Bernstein told the court that if Clark’s arguments regarding retiree benefits were accepted, “you’d have to have a [retiree] committee in every case.”
Many have called me regarding the ballots, to help answer some of the lingering questions, you can contact primeclerk directly on specific voting questions.
Reference Avaya to your questions. Here is the personal contact information to the person I have talked with at PrimeClerk.
You can email him the question or try calling.
Michael Deboissiere
mdeboissiere@primeclerk.com
Prime Clerk
830 Third Avenue, 9th Floor
New York, NY 10022
212 257 5829 office
917 921 8768 mobile
primeclerk.com
Avaya Extension Approved
The U.S. Bankruptcy Court approved Avaya's motion for a third order extending the Debtors' exclusive periods to file a Chapter 11 Plan and solicit acceptances thereof through and including November 30, 2017 and January 31, 2018, respectively.
As previously reported, "Since their last exclusivity extension was granted on July 26, 2017, the Debtors have successfully negotiated a Stipulation of Settlement Between the Debtors and Pension Benefit Guaranty Corporation resolving the treatment of the Debtors' qualified pension liabilities; completed successful negotiations with the Official Committee of Unsecured Creditors through improved recoveries and additional modifications to their Amended Plan; obtained Court approval with respect to their Disclosure Statement for the First Amended Joint Chapter 11 Plan of Reorganization and Plan Support Agreement (the 'PSA').
This progress has been achieved against the backdrop of what all parties have recognized are large, complex chapter cases involving billions of dollars of funded debt and legacy liabilities, global operations, thousands of employees and retirees, and a diverse set of stakeholder constituencies.
The brief exclusivity extension requested herein will permit the Debtors to build on this progress without substantial disruption or delay that would result if parties were permitted to file competing plans at this critical juncture.
On the one hand, continued exclusivity will permit the Debtors to continue forward in preparation for their November 15, 2017 confirmation hearing. And on the other hand, continued exclusivity will foster the Debtors' ability to engage creditor constituencies to further develop consensus around the Amended Plan if at all reasonably possible."
Check Out Chapter Webpage on NRLN Website
Check out our Avaya Retirees Chapter's webpage often for new information at:
http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html
To learn more about the NRLN go to: www.nrln.org .
If you know any other Avaya Retirees who are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions please send them the link below and ask them to join the NRLN Avaya Retirees Chapter. All those who have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter at:
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Regards,
Vern Larson, President, NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Phone: 402-203-6899
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: NRLN Avaya Retirees Chapter Members in Salaried Pension Plan
From: Vern Larson, President – NRLN Avaya Retirees Chapter
Subject: What happens when a pension plan is terminated and transferred to PBGC?
When an underfunded pension plan is terminated, PBGC becomes responsible for paying plan benefits and takes over the pension plan’s remaining assets.
PBGC reviews your plan's records to determine the benefits each person will receive. The amount the PBGC pays is subject to limits set by law.
If you are already receiving a pension, the PBGC will continue paying you without interruption during its review.
These payments are an estimate of the benefits that PBGC can pay under the insurance program.
The PBGC will pay the benefits in the annuity form you chose at retirement, generally the same type of annuity that you were receiving from your plan.
If you have not yet retired, the PBGC will pay you an estimated benefit amount when you become eligible and apply to PBGC to begin payments.
Some pension plans offer their participants lump sum payments for the full value of their pensions, but PBGC generally does not.
PBGC pays benefits in monthly payments for life. However, if the total value of your PBGC benefit is $5,000 or less, you can receive a lump sum from PBGC.
According to the PBGC at this time those with questions about their pension benefits should still call Avaya. At this time, the Avaya pension plans remain ongoing and under the responsibility of Avaya.
Avaya pension plan participants with questions about their benefits should contact the Avaya Pension Service Center at 844-868-6236, Monday-Friday, 9am-6pm EDT
//////////////////////////////////////////////////
Daily News from Bankruptcy Data - August 28, 2017
BUSINESS BANKRUPTCY HEADLINES - Avaya Disclosure Statement Re-Approved
The U.S. Bankruptcy Court issued an order re-approving Avaya's Disclosure Statement and scheduled a November 15, 2017 hearing to consider the First Amended Joint Chapter 11 Plan of Reorganization, with objections due by November 1, 2017.
As previously reported, "In developing the Plan, the Debtors engaged in good faith negotiations with many of their key stakeholders, including, among others, the Committee, PBGC and the Ad Hoc First Lien Group. The Plan is the culmination of those discussions and embodies a global settlement of issues between the Debtors, the Committee, PBGC, and the Ad Hoc First Lien Group (the 'Global Plan Settlement').
The components of the Global Plan Settlement include, among other things:
(i) the PBGC Settlement, which, among other things, provides for the termination of the Avaya Salaried Pension Plan in exchange for certain consideration, on the terms and conditions set forth therein;
(ii) the Valuation Settlement, which establishes a Settled Valuation for the Avaya Enterprise of $5.721 billion (which includes $201 million attributable to certain of the Debtors' intellectual property) and the allocation of such value under the Plan in the nature of a settlement; and
(iii) the Challenge Claims Settlement, which among other things, settles certain potential Claims and Causes of Action which could have been asserted on behalf of the Debtors….
(iv) the Allowed PBGC Claims include $1,240,300,000 on account of unfunded benefit liabilities with respect to the Avaya Salaried Pension Plan, plus any and all unpaid minimum funding contributions due with respect to the Avaya Salaried Pension Plan."
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
From: Vern Larson, President – NRLN Avaya Retirees Chapter
Subject: What happens when a pension plan is terminated and transferred to PBGC?
When an underfunded pension plan is terminated, PBGC becomes responsible for paying plan benefits and takes over the pension plan’s remaining assets.
PBGC reviews your plan's records to determine the benefits each person will receive. The amount the PBGC pays is subject to limits set by law.
If you are already receiving a pension, the PBGC will continue paying you without interruption during its review.
These payments are an estimate of the benefits that PBGC can pay under the insurance program.
The PBGC will pay the benefits in the annuity form you chose at retirement, generally the same type of annuity that you were receiving from your plan.
If you have not yet retired, the PBGC will pay you an estimated benefit amount when you become eligible and apply to PBGC to begin payments.
Some pension plans offer their participants lump sum payments for the full value of their pensions, but PBGC generally does not.
PBGC pays benefits in monthly payments for life. However, if the total value of your PBGC benefit is $5,000 or less, you can receive a lump sum from PBGC.
According to the PBGC at this time those with questions about their pension benefits should still call Avaya. At this time, the Avaya pension plans remain ongoing and under the responsibility of Avaya.
Avaya pension plan participants with questions about their benefits should contact the Avaya Pension Service Center at 844-868-6236, Monday-Friday, 9am-6pm EDT
//////////////////////////////////////////////////
Daily News from Bankruptcy Data - August 28, 2017
BUSINESS BANKRUPTCY HEADLINES - Avaya Disclosure Statement Re-Approved
The U.S. Bankruptcy Court issued an order re-approving Avaya's Disclosure Statement and scheduled a November 15, 2017 hearing to consider the First Amended Joint Chapter 11 Plan of Reorganization, with objections due by November 1, 2017.
As previously reported, "In developing the Plan, the Debtors engaged in good faith negotiations with many of their key stakeholders, including, among others, the Committee, PBGC and the Ad Hoc First Lien Group. The Plan is the culmination of those discussions and embodies a global settlement of issues between the Debtors, the Committee, PBGC, and the Ad Hoc First Lien Group (the 'Global Plan Settlement').
The components of the Global Plan Settlement include, among other things:
(i) the PBGC Settlement, which, among other things, provides for the termination of the Avaya Salaried Pension Plan in exchange for certain consideration, on the terms and conditions set forth therein;
(ii) the Valuation Settlement, which establishes a Settled Valuation for the Avaya Enterprise of $5.721 billion (which includes $201 million attributable to certain of the Debtors' intellectual property) and the allocation of such value under the Plan in the nature of a settlement; and
(iii) the Challenge Claims Settlement, which among other things, settles certain potential Claims and Causes of Action which could have been asserted on behalf of the Debtors….
(iv) the Allowed PBGC Claims include $1,240,300,000 on account of unfunded benefit liabilities with respect to the Avaya Salaried Pension Plan, plus any and all unpaid minimum funding contributions due with respect to the Avaya Salaried Pension Plan."
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: All Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Business Bankruptcy Headlines: Avaya Plan Filed, Aug. 25, 2017
Avaya filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "In developing the Plan, the Debtors engaged in good faith negotiations with many of their key stakeholders, including, among others, the Committee, PBGC and the Ad Hoc First Lien Group.
The Plan is the culmination of those discussions and embodies a global settlement of issues between the Debtors, the Committee, PBGC, and the Ad Hoc First Lien Group (the 'Global Plan Settlement').
The components of the Global Plan Settlement include, among other things: (i) the PBGC Settlement, which, among other things, provides for the termination of the Avaya Salaried Pension Plan in exchange for certain consideration, on the terms and conditions set forth therein;
(ii) the Valuation Settlement, which establishes a Settled Valuation for the Avaya Enterprise of $5.721 billion (which includes $201 million attributable to certain of the Debtors' intellectual property) and the allocation of such value under the Plan in the nature of a settlement; and
(iii) the Challenge Claims Settlement, which among other things, settles certain potential Claims and Causes of Action which could have been asserted on behalf of the Debtors….Based on the Settled Valuation and other elements of the Global Plan Settlement, including with respect to the treatment of the adequate protection payments made by the Debtors to or for the benefit of Holders of First Lien Debt Claims during the pendency of the Chapter 11 Cases for Plan distribution purposes, the Allowed First Lien Debt Claims in the amount of $4,609,365,976 will be reduced by payments made as adequate protection solely to the extent by which such adequate protection payments exceed the amount of Encumbered Value that is used to satisfy administrative expenses properly allocable to Unencumbered Value for which there is insufficient Unencumbered Value to satisfy, which reduction is estimated to be approximately $232 million as of the date hereof….
The Allowed PBGC Claims include $1,240,300,000 on account of unfunded benefit liabilities with respect to the Avaya Salaried Pension Plan, plus any and all unpaid minimum funding contributions due with respect to the Avaya Salaried Pension Plan.
The Court scheduled a November 14, 2017 hearing to consider the Plan.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Business Bankruptcy Headlines: Avaya Plan Filed, Aug. 25, 2017
Avaya filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "In developing the Plan, the Debtors engaged in good faith negotiations with many of their key stakeholders, including, among others, the Committee, PBGC and the Ad Hoc First Lien Group.
The Plan is the culmination of those discussions and embodies a global settlement of issues between the Debtors, the Committee, PBGC, and the Ad Hoc First Lien Group (the 'Global Plan Settlement').
The components of the Global Plan Settlement include, among other things: (i) the PBGC Settlement, which, among other things, provides for the termination of the Avaya Salaried Pension Plan in exchange for certain consideration, on the terms and conditions set forth therein;
(ii) the Valuation Settlement, which establishes a Settled Valuation for the Avaya Enterprise of $5.721 billion (which includes $201 million attributable to certain of the Debtors' intellectual property) and the allocation of such value under the Plan in the nature of a settlement; and
(iii) the Challenge Claims Settlement, which among other things, settles certain potential Claims and Causes of Action which could have been asserted on behalf of the Debtors….Based on the Settled Valuation and other elements of the Global Plan Settlement, including with respect to the treatment of the adequate protection payments made by the Debtors to or for the benefit of Holders of First Lien Debt Claims during the pendency of the Chapter 11 Cases for Plan distribution purposes, the Allowed First Lien Debt Claims in the amount of $4,609,365,976 will be reduced by payments made as adequate protection solely to the extent by which such adequate protection payments exceed the amount of Encumbered Value that is used to satisfy administrative expenses properly allocable to Unencumbered Value for which there is insufficient Unencumbered Value to satisfy, which reduction is estimated to be approximately $232 million as of the date hereof….
The Allowed PBGC Claims include $1,240,300,000 on account of unfunded benefit liabilities with respect to the Avaya Salaried Pension Plan, plus any and all unpaid minimum funding contributions due with respect to the Avaya Salaried Pension Plan.
The Court scheduled a November 14, 2017 hearing to consider the Plan.
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Click To View Documents: Avaya - PSA Supplement for Unsecured Claim Treatment.pdf (125KB);
August 23, 2017
Attention: Avaya Retirees Who Had a Supplemental Pension
I believe the attached court document may include our supplemental pension is in this pool. We will find out today if this mean we would have the choice of stock or cash?
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
August 23, 2017
Attention: Avaya Retirees Who Had a Supplemental Pension
I believe the attached court document may include our supplemental pension is in this pool. We will find out today if this mean we would have the choice of stock or cash?
Vern Larson, President
NRLN Avaya Retirees Chapter
Email: vernlarson@cox.net
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
August 10, 2017
To: All NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Working on Sending Your Questions to PBGC and Other News
I have received 100s of emails and calls since our last posting on Monday, where the PBGC offered to answer additional questions for us from our Avaya members. I am working on culling out duplicate questions so I can send a more compact list to get the PBGC’s official response for us. Stayed tuned for more information as we receive more details.
In the court’s Docket 902 documents the company has asked for an entry of an order approving the PBGC settlement and distress termination of the Avaya Salaried Pension Plan by 5:00 p.m. prevailing Eastern Time on October 31, 2017; and substantial consummation of the Amended Plan by 5:00 p.m. prevailing Eastern Time on the earlier of (A) 30 days after entry of the order confirming the Amended Plan and (B) November 30, 2017.
The proposed PSA (Plan Support Agreement) milestones include, among other deadlines: The Plan Support Agreement Complies with Section 1125 - 23. Section 1125(b) of the Bankruptcy Code. The PSA provides that Chief Executive Officer Kevin J. Kennedy will leave the company but be retained as an advisor (consultant) to the Reorganized Debtors, the terms of which are set forth in the term sheet Exhibit B -1, and the agreement providing for the employment of James M. Chirico, Jr., as Chief Executive Officer of the Reorganized Debtors (the “Executive Employment Agreement”) the terms of which are very interesting. These are set forth in the term sheet Exhibit B-2 in the docket.
The good news it is proposed that the Hourly (Union) Pension and benefits will be continued by Avaya, NewCo and is covered in detail. It mentions that retaining the Hourly Union contractual plan would help expedite a more speedy acceptance of the new proposed PSA and possibly eliminate expensive and time consuming litigation that could delay acceptance of the overall plan to exit Chapter 11 Bankruptcy in a more timely manner.
Also, in the filings the first mention of the need to have the Bankruptcy Court US trustee form a 1114 Health and Welfare Committee, this is an important committee that we have been waiting for. This is the committee that will work on the OEPB’s (Other Employee Pension Benefits), life insurance, health insurance, health saving accounts, etc. Bankruptcy law provides retirees to actually sit on this committee. We want Avaya Retirees Chapter members on the committee.
Deadlines set for the plan.
Disclosure Statement, and (C) Disclosure Statement Motion by August 7, 2017; done.
Entry of an order approving the PSA by 5:00 p.m. Eastern Time on August 31, 2017 or as soon as the Bankruptcy Court’s calendar will permit, but in any case no later than 7 days thereafter.
Entry of an order approving the Disclosure Statement Motion by 5:00 p.m. prevailing Eastern Time on August 31, 2017 or as soon as the Bankruptcy Court’s calendar will permit, but in any case no later than 7 days thereafter.
Proposed Hearing Date and Time is less than two weeks from now: August 23, 2017 at 2:00 p.m. (prevailing Eastern Time) and Proposed Objection Deadline: August 16, 2017 at 4:00 p.m.
Here is the link to the Avaya court website.
https://cases.primeclerk.com/avaya/Home-DocketInfo
Thanks to Chapter Members
Thanks in advance to all of you for your support in creating a strong NRLN Avaya Retirees Chapter to serve as your voice on the protection of our pension and other retirement security issues.
If you know any other Avaya Retirees or any current vested Avaya employees or retired vested not yet collecting their pensions please send them this link below and ask them to join.
To register in the NRLN Avaya Retirees Chapter to receive emails from the Chapter and the NRLN, go to: http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
See news article below which contain some more correct and concise numbers than some previous news articles.
Respectfully Submitted.
Vern Larson, President, NRLN Avaya Chapter
Phone: 402-203-6899,
Email vernlarson@cox.net
///////////////////////////////////////////////////
https://www.bna.com/avaya-reaches-300m-n73014462862/Avaya Reaches $300M Deal With PBGC Amid BankruptcyBy Carmen Castron-Pagan, Bloomberg BNA – Aug 7 2017
Avaya Inc. and the Pension Benefit Guaranty Corporation reached a $300 million settlement involving one of the communication company’s pension plans ( Avaya, Inc. , Bankr. S.D.N.Y., No. 1:17-bk-10089, first amended joint chapter 11 reorganization plan filed 8/7/17 ).
Avaya will pay $300 million in cash and issue 7.5 percent of its reorganized holding company common stock to the PBGC, Avaya announced Aug. 7 in a filing with the Securities and Exchange Commission. The settlement provides for the termination of Avaya’s Salaried Pension Plan. The company’s Hourly Pension Plan will continue.
California-based Avaya is a multinational technology company that provides unified communications products and services, including telephone, internet, wireless data, and real-time video collaboration.
Bloomberg Law®, an integrated legal research and business intelligence solution, combines trusted news and analysis with cutting-edge technology to provide legal professionals tools to be proactive advisors.
The company filed for bankruptcy Jan. 19. At the time, the company listed $5.5 billion in assets and $6.4 billion in debts. Some of its largest creditors included Wistron Technology America, Avnet Inc., Hewlett Packard, Verint Americas Inc., and Sales-Force.com Inc.
The PBGC has a claim in unfunded liabilities of up to $1.24 billion with respect to Avaya’s Salaried Pension Plan, according to the filings. The settlement is part of Avaya’s reorganization plan with its debtors and needs to be confirmed by the U.S. Bankruptcy Court for the Southern District of New York.
Avaya’s Salaried Pension Plan had 7,978 participants, $1.5 billion in assets, and was 88.64 percent funded as of December 2015, according to company filings. The plan was frozen in 2003.
The company’s other qualified defined benefit pension plan had 6,912 participants, $777 million in assets, and was 88.73 percent funded as of December 2015, according to company filings.
The plans’ funding shortfalls are greater, according to the PBGC. The pension plan for salaried employees is 58 percent funded and has $1.1 billion in unfunded obligations, according to a PBGC statement. The pension plan for hourly employees is underfunded by $600 million, the agency said.
A number of participants in Avaya’s non-qualified pension plan, which is not insured by the PBGC, filed letters asking the court to protect their pension benefits. Some of the participants who filed the letters took issue with Avaya’s request seeking authorization to pay up to $3.7 million in executive bonuses while, they said, the company suspended their non-qualified pension payments.
Kirkland & Ellis LLP represents Avaya.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com
To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com
For More Information
Text of the Reorganization Plan is at http://www.bloomberglaw.com/public/document/Avaya_Inc_Docket_No_117bk10089_Bankr_SDNY_Jan_19_2017_Court_Docke/4?doc_id=X1Q6NSV0D2O2&fmt=pdf.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserv
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: All NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Working on Sending Your Questions to PBGC and Other News
I have received 100s of emails and calls since our last posting on Monday, where the PBGC offered to answer additional questions for us from our Avaya members. I am working on culling out duplicate questions so I can send a more compact list to get the PBGC’s official response for us. Stayed tuned for more information as we receive more details.
In the court’s Docket 902 documents the company has asked for an entry of an order approving the PBGC settlement and distress termination of the Avaya Salaried Pension Plan by 5:00 p.m. prevailing Eastern Time on October 31, 2017; and substantial consummation of the Amended Plan by 5:00 p.m. prevailing Eastern Time on the earlier of (A) 30 days after entry of the order confirming the Amended Plan and (B) November 30, 2017.
The proposed PSA (Plan Support Agreement) milestones include, among other deadlines: The Plan Support Agreement Complies with Section 1125 - 23. Section 1125(b) of the Bankruptcy Code. The PSA provides that Chief Executive Officer Kevin J. Kennedy will leave the company but be retained as an advisor (consultant) to the Reorganized Debtors, the terms of which are set forth in the term sheet Exhibit B -1, and the agreement providing for the employment of James M. Chirico, Jr., as Chief Executive Officer of the Reorganized Debtors (the “Executive Employment Agreement”) the terms of which are very interesting. These are set forth in the term sheet Exhibit B-2 in the docket.
The good news it is proposed that the Hourly (Union) Pension and benefits will be continued by Avaya, NewCo and is covered in detail. It mentions that retaining the Hourly Union contractual plan would help expedite a more speedy acceptance of the new proposed PSA and possibly eliminate expensive and time consuming litigation that could delay acceptance of the overall plan to exit Chapter 11 Bankruptcy in a more timely manner.
Also, in the filings the first mention of the need to have the Bankruptcy Court US trustee form a 1114 Health and Welfare Committee, this is an important committee that we have been waiting for. This is the committee that will work on the OEPB’s (Other Employee Pension Benefits), life insurance, health insurance, health saving accounts, etc. Bankruptcy law provides retirees to actually sit on this committee. We want Avaya Retirees Chapter members on the committee.
Deadlines set for the plan.
Disclosure Statement, and (C) Disclosure Statement Motion by August 7, 2017; done.
Entry of an order approving the PSA by 5:00 p.m. Eastern Time on August 31, 2017 or as soon as the Bankruptcy Court’s calendar will permit, but in any case no later than 7 days thereafter.
Entry of an order approving the Disclosure Statement Motion by 5:00 p.m. prevailing Eastern Time on August 31, 2017 or as soon as the Bankruptcy Court’s calendar will permit, but in any case no later than 7 days thereafter.
Proposed Hearing Date and Time is less than two weeks from now: August 23, 2017 at 2:00 p.m. (prevailing Eastern Time) and Proposed Objection Deadline: August 16, 2017 at 4:00 p.m.
Here is the link to the Avaya court website.
https://cases.primeclerk.com/avaya/Home-DocketInfo
Thanks to Chapter Members
Thanks in advance to all of you for your support in creating a strong NRLN Avaya Retirees Chapter to serve as your voice on the protection of our pension and other retirement security issues.
If you know any other Avaya Retirees or any current vested Avaya employees or retired vested not yet collecting their pensions please send them this link below and ask them to join.
To register in the NRLN Avaya Retirees Chapter to receive emails from the Chapter and the NRLN, go to: http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
See news article below which contain some more correct and concise numbers than some previous news articles.
Respectfully Submitted.
Vern Larson, President, NRLN Avaya Chapter
Phone: 402-203-6899,
Email vernlarson@cox.net
///////////////////////////////////////////////////
https://www.bna.com/avaya-reaches-300m-n73014462862/Avaya Reaches $300M Deal With PBGC Amid BankruptcyBy Carmen Castron-Pagan, Bloomberg BNA – Aug 7 2017
Avaya Inc. and the Pension Benefit Guaranty Corporation reached a $300 million settlement involving one of the communication company’s pension plans ( Avaya, Inc. , Bankr. S.D.N.Y., No. 1:17-bk-10089, first amended joint chapter 11 reorganization plan filed 8/7/17 ).
Avaya will pay $300 million in cash and issue 7.5 percent of its reorganized holding company common stock to the PBGC, Avaya announced Aug. 7 in a filing with the Securities and Exchange Commission. The settlement provides for the termination of Avaya’s Salaried Pension Plan. The company’s Hourly Pension Plan will continue.
California-based Avaya is a multinational technology company that provides unified communications products and services, including telephone, internet, wireless data, and real-time video collaboration.
Bloomberg Law®, an integrated legal research and business intelligence solution, combines trusted news and analysis with cutting-edge technology to provide legal professionals tools to be proactive advisors.
The company filed for bankruptcy Jan. 19. At the time, the company listed $5.5 billion in assets and $6.4 billion in debts. Some of its largest creditors included Wistron Technology America, Avnet Inc., Hewlett Packard, Verint Americas Inc., and Sales-Force.com Inc.
The PBGC has a claim in unfunded liabilities of up to $1.24 billion with respect to Avaya’s Salaried Pension Plan, according to the filings. The settlement is part of Avaya’s reorganization plan with its debtors and needs to be confirmed by the U.S. Bankruptcy Court for the Southern District of New York.
Avaya’s Salaried Pension Plan had 7,978 participants, $1.5 billion in assets, and was 88.64 percent funded as of December 2015, according to company filings. The plan was frozen in 2003.
The company’s other qualified defined benefit pension plan had 6,912 participants, $777 million in assets, and was 88.73 percent funded as of December 2015, according to company filings.
The plans’ funding shortfalls are greater, according to the PBGC. The pension plan for salaried employees is 58 percent funded and has $1.1 billion in unfunded obligations, according to a PBGC statement. The pension plan for hourly employees is underfunded by $600 million, the agency said.
A number of participants in Avaya’s non-qualified pension plan, which is not insured by the PBGC, filed letters asking the court to protect their pension benefits. Some of the participants who filed the letters took issue with Avaya’s request seeking authorization to pay up to $3.7 million in executive bonuses while, they said, the company suspended their non-qualified pension payments.
Kirkland & Ellis LLP represents Avaya.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com
To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com
For More Information
Text of the Reorganization Plan is at http://www.bloomberglaw.com/public/document/Avaya_Inc_Docket_No_117bk10089_Bankr_SDNY_Jan_19_2017_Court_Docke/4?doc_id=X1Q6NSV0D2O2&fmt=pdf.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserv
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
August 8, 2017
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Avaya Reaches Deal with Creditors to Exit Bankruptcy
Yesterday, Avaya announced that the Salaried Pension plan that was frozen in 2003 will be classified as in distress and will give the Pension Benefit Guaranty Corporation (PBGC) $300 million to take over the plan plus over 7% of the new Avaya company stock. They made a deal with the main First Lien Holders to ask the court to approve. In the plan the Hourly, Union Pension Plan and benefits will continue to be paid by the new Avaya Company. All details are listed On Prime Clerk as Docket 902, pages 11 & 12 https://cases.primeclerk.com/avaya/Home-DocketInfo
I have been working on posting additional information to all members. Here are some more details. Also a Reuters news article on the bankruptcy agreement is below.
Special, note the information “First-lien debt holders will receive about 95 percent of what they are owed, while holders of $1.44 billion in second-lien notes will receive about 1.6 percent, according to court papers. Unsecured creditors will receive around 8.2 percent of the $305 million they are owed.” Unsecured creditors will receive around 8.2 percent.
Avaya Plan Filed
Avaya filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan provides for the issuance of the New Secured Debt, with an aggregate principal amount of not less than $2,925 million (inclusive of any original issue discount) (the 'Syndication Amount') in form and substance materially consistent with the New Secured Debt Term Sheet and otherwise acceptable to the Reorganized Debtors and the Requisite First Lien Creditors, and subject to the New Secured Debt Term Sheet. Pursuant to the Plan, Holders of First Lien Debt Claims shall receive, as part of their distribution under the Plan, their Pro Rata share of: (1) if the New Secured Debt is syndicated in an amount greater than or equal to the Syndication Amount, such Holder will receive its Pro Rata share of the First Lien Cash Distribution; or (2) if the New Secured Debt is syndicated in an amount less than the Syndication Amount, such Holder will receive its Pro Rata share of the (a) un-syndicated portion of the New Secured Debt and (b) Cash in an amount equal to the proceeds from the syndication of the New Secured Debt less the New Secured Debt Cash Deductions….The Plan includes a Management Equity Incentive Plan, which would permit the reservation or issuance of Reorganized HoldCo Common Stock, or other Interests in Reorganized HoldCo, on a fully diluted basis, to directors, officers, and employees of the Reorganized Debtors, with awards and terms and conditions thereunder determined by the Reorganized HoldCo Board, except as otherwise set forth in the Executive Employment Agreement. Any Entity voting on the Plan should be aware that the Management Equity Incentive Plan may dilute equity distributions under the Plan, including with respect to distributions of Reorganized HoldCo Common Stock."
Subject: PBGC - Q and A for NRLN Avaya Retirees Chapter
I have posted the link below of the just released Questions and Answers for Avaya Retirees Chapter Members from the PBGC, these are somewhat standard issue for all pension plan terminations. I would recommend for all to copy these and save so we can refer back to them as needed. These will help answer many of the questions everyone has.
I have been asked by the PBGC to extend an invitation to the Avaya Retirees Chapter members with other questions to send them to me and I will communicate directly with the PBGC for easy access for us to get timely answers.
My offer is to screen input for duplicity and answers but can also get answers for unique questions not addressed. Example, PBGC will not calculate anyone’s pension or make comments about one since they do this one-by-one after the termination, not before. I want to be careful to not get trapped into listening to long war stories we know can’t be resolved yet.
From our PBGC contact.
"We posted the Q&As just a few minutes ago, but as I always like to say, “nothing on the internet is written in stone!” click link below. Although not colored as a LINK - it DOES when you click on it and then goes to the Pension Guarantee site with additional explanations. I added this note to my website of OmahaWorks - Steve Miller (it was hard to see this important link from NRLN site).
· Questions and Answers for Participants in the Avaya Pension Plans
“We’d be happy to hear ideas for more questions from the NRLN Avaya Retirees group and we’d certainly value their input. In thinking about the initial set of Q&As, we expected workers and retirees to have questions specific to their own circumstances that we can’t yet answer. However, if we can provide more information about our part in the process or assuage other concerns we’re be happy to do so.
Please let them know they can send their suggestions for additional questions in."
Regards, Vern Larson, President, NRLN Avaya Retirees Chapter
https://www.reuters.com/article/us-avaya-bankruptcy-idUSKBN1AN1Y9
Avaya reaches deal with creditors to exit bankruptcy
By Tom Hals; Reuters ~ Aug 07, 2017
WILMINGTON, Del (Reuters) - A path has been cleared for telecommunications company Avaya Inc to exit Chapter 11 bankruptcy in an agreement with its senior creditors and the government's pension insurer, Avaya said in a statement on Monday.
Avaya said that it had backing from holders of more than half of its $4.38 billion first-lien debt and a settlement with the Pension Benefit Guaranty Corp to terminate its underfunded salaried employee pension plan.
The agreements could cut more than $3 billion from the $6.3 billion in debt Avaya had when it entered bankruptcy in January.
Avaya had faced challenges in trying to transition to software and services from a business centered on hardware, and failed to sell its call center business.
Avaya also struggled with pension obligations. The PBGC has said Avaya's hourly workers plan was underfunded by $660 million and its salaried workers plan was underfunded by $1.24 billion.
The Santa Clara, California-based company will pay the PBGC $300 million and give it 7.5 percent of the stock in the reorganized Avaya in return for transferring obligations for the salaried plan to the PBGC, according to court documents.
The reorganized company will maintain its pension plan for hourly employees.
Under the plan, which must be approved by Avaya's creditors and U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, debt holders will be repaid with a mix of cash, new debt and stock in the reorganized company.
A new board will be named by holders of the company's first-lien debt, who will own a majority of the stock in the reorganized company. Holders of the first-lien debt include funds affiliated with The Blackstone Group's GSO Capital Partners, Davidson Kempner and JPMorgan Chase & Co, as well as dozens of other firms.
Avaya estimated in court papers its enterprise value, which includes debt and equity, at $5.721 billion.
First-lien debt holders will receive about 95 percent of what they are owed, while holders of $1.44 billion in second-lien notes will receive about 1.6 percent, according to court papers. Unsecured creditors will receive around 8.2 percent of the $305 million they are owed.
The company's debt stems in part from an $8.2 billion buyout in 2007 by private equity firms Silver Lake Partners LP and TPG Capital LP.
Reporting by Tom Hals in Wilmington, Delaware; editing by Grant McCool
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Avaya Reaches Deal with Creditors to Exit Bankruptcy
Yesterday, Avaya announced that the Salaried Pension plan that was frozen in 2003 will be classified as in distress and will give the Pension Benefit Guaranty Corporation (PBGC) $300 million to take over the plan plus over 7% of the new Avaya company stock. They made a deal with the main First Lien Holders to ask the court to approve. In the plan the Hourly, Union Pension Plan and benefits will continue to be paid by the new Avaya Company. All details are listed On Prime Clerk as Docket 902, pages 11 & 12 https://cases.primeclerk.com/avaya/Home-DocketInfo
I have been working on posting additional information to all members. Here are some more details. Also a Reuters news article on the bankruptcy agreement is below.
Special, note the information “First-lien debt holders will receive about 95 percent of what they are owed, while holders of $1.44 billion in second-lien notes will receive about 1.6 percent, according to court papers. Unsecured creditors will receive around 8.2 percent of the $305 million they are owed.” Unsecured creditors will receive around 8.2 percent.
Avaya Plan Filed
Avaya filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan provides for the issuance of the New Secured Debt, with an aggregate principal amount of not less than $2,925 million (inclusive of any original issue discount) (the 'Syndication Amount') in form and substance materially consistent with the New Secured Debt Term Sheet and otherwise acceptable to the Reorganized Debtors and the Requisite First Lien Creditors, and subject to the New Secured Debt Term Sheet. Pursuant to the Plan, Holders of First Lien Debt Claims shall receive, as part of their distribution under the Plan, their Pro Rata share of: (1) if the New Secured Debt is syndicated in an amount greater than or equal to the Syndication Amount, such Holder will receive its Pro Rata share of the First Lien Cash Distribution; or (2) if the New Secured Debt is syndicated in an amount less than the Syndication Amount, such Holder will receive its Pro Rata share of the (a) un-syndicated portion of the New Secured Debt and (b) Cash in an amount equal to the proceeds from the syndication of the New Secured Debt less the New Secured Debt Cash Deductions….The Plan includes a Management Equity Incentive Plan, which would permit the reservation or issuance of Reorganized HoldCo Common Stock, or other Interests in Reorganized HoldCo, on a fully diluted basis, to directors, officers, and employees of the Reorganized Debtors, with awards and terms and conditions thereunder determined by the Reorganized HoldCo Board, except as otherwise set forth in the Executive Employment Agreement. Any Entity voting on the Plan should be aware that the Management Equity Incentive Plan may dilute equity distributions under the Plan, including with respect to distributions of Reorganized HoldCo Common Stock."
Subject: PBGC - Q and A for NRLN Avaya Retirees Chapter
I have posted the link below of the just released Questions and Answers for Avaya Retirees Chapter Members from the PBGC, these are somewhat standard issue for all pension plan terminations. I would recommend for all to copy these and save so we can refer back to them as needed. These will help answer many of the questions everyone has.
I have been asked by the PBGC to extend an invitation to the Avaya Retirees Chapter members with other questions to send them to me and I will communicate directly with the PBGC for easy access for us to get timely answers.
My offer is to screen input for duplicity and answers but can also get answers for unique questions not addressed. Example, PBGC will not calculate anyone’s pension or make comments about one since they do this one-by-one after the termination, not before. I want to be careful to not get trapped into listening to long war stories we know can’t be resolved yet.
From our PBGC contact.
"We posted the Q&As just a few minutes ago, but as I always like to say, “nothing on the internet is written in stone!” click link below. Although not colored as a LINK - it DOES when you click on it and then goes to the Pension Guarantee site with additional explanations. I added this note to my website of OmahaWorks - Steve Miller (it was hard to see this important link from NRLN site).
· Questions and Answers for Participants in the Avaya Pension Plans
“We’d be happy to hear ideas for more questions from the NRLN Avaya Retirees group and we’d certainly value their input. In thinking about the initial set of Q&As, we expected workers and retirees to have questions specific to their own circumstances that we can’t yet answer. However, if we can provide more information about our part in the process or assuage other concerns we’re be happy to do so.
Please let them know they can send their suggestions for additional questions in."
Regards, Vern Larson, President, NRLN Avaya Retirees Chapter
https://www.reuters.com/article/us-avaya-bankruptcy-idUSKBN1AN1Y9
Avaya reaches deal with creditors to exit bankruptcy
By Tom Hals; Reuters ~ Aug 07, 2017
WILMINGTON, Del (Reuters) - A path has been cleared for telecommunications company Avaya Inc to exit Chapter 11 bankruptcy in an agreement with its senior creditors and the government's pension insurer, Avaya said in a statement on Monday.
Avaya said that it had backing from holders of more than half of its $4.38 billion first-lien debt and a settlement with the Pension Benefit Guaranty Corp to terminate its underfunded salaried employee pension plan.
The agreements could cut more than $3 billion from the $6.3 billion in debt Avaya had when it entered bankruptcy in January.
Avaya had faced challenges in trying to transition to software and services from a business centered on hardware, and failed to sell its call center business.
Avaya also struggled with pension obligations. The PBGC has said Avaya's hourly workers plan was underfunded by $660 million and its salaried workers plan was underfunded by $1.24 billion.
The Santa Clara, California-based company will pay the PBGC $300 million and give it 7.5 percent of the stock in the reorganized Avaya in return for transferring obligations for the salaried plan to the PBGC, according to court documents.
The reorganized company will maintain its pension plan for hourly employees.
Under the plan, which must be approved by Avaya's creditors and U.S. Bankruptcy Judge Stuart Bernstein in Manhattan, debt holders will be repaid with a mix of cash, new debt and stock in the reorganized company.
A new board will be named by holders of the company's first-lien debt, who will own a majority of the stock in the reorganized company. Holders of the first-lien debt include funds affiliated with The Blackstone Group's GSO Capital Partners, Davidson Kempner and JPMorgan Chase & Co, as well as dozens of other firms.
Avaya estimated in court papers its enterprise value, which includes debt and equity, at $5.721 billion.
First-lien debt holders will receive about 95 percent of what they are owed, while holders of $1.44 billion in second-lien notes will receive about 1.6 percent, according to court papers. Unsecured creditors will receive around 8.2 percent of the $305 million they are owed.
The company's debt stems in part from an $8.2 billion buyout in 2007 by private equity firms Silver Lake Partners LP and TPG Capital LP.
Reporting by Tom Hals in Wilmington, Delaware; editing by Grant McCool
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Avaya Bankruptcy Extension Approved
Bankruptcy Data News – July 27, 2017
The U.S. Bankruptcy Court approved Avaya's motion to extend by 60 days the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through and including September 16, 2017 and November 15, 2017, respectively. As previously reported,
"The Debtors have engaged in direct discussions with key stakeholders, reflecting a substantial portion of their overall capital structure, in an effort to achieve a global resolution among such groups regarding their ultimate reorganization.
While the confidential nature of these discussions preclude a more fulsome description at the present time, the Debtors strongly believe that the brief, 60-day continuation of the Exclusivity Periods will further these discussions and, hopefully, facilitate a successful conclusion in the near term.
Conversely, terminating or limiting the Debtors' exclusivity at this crucial juncture in these chapter 11 cases could jeopardize the progress made to date, and hinder the ongoing negotiations, which are aimed at providing a clear path to emergence for these estates."
Unsure how this effects Avaya's bankruptcy filings...yet news of information
https://www.avaya.com/investors/usa/newsroom/news-releases/2017/pr-us-170717/
Extreme Networks Completes Acquisition of the Networking Business from Avaya, Inc.
Avaya Press Release – July 17, 2017
San Jose, Calif. — July 17, 2017 – Extreme Networks, Inc. (NASDAQ: EXTR) announced today that it has completed its acquisition of Avaya Inc.’s ("Avaya") networking business. The acquisition supports the company’s growth strategy to lead the enterprise networking market with end-to-end software-driven solutions for enterprise customers from the data center to the wireless edge.
“This is an exciting day for Extreme and a strategic milestone for our company that further enables us to deliver the end-to-end networking solutions and services enterprise customers across our target vertical markets need to run their businesses,” said Ed Meyercord, President and CEO of Extreme Networks. “In addition to acquiring networking assets that complement and strengthen our capabilities, we are expanding our bench of talented and experienced employees, partners and networking customers. We’ve already seen great participation from new and existing partners and customers during our recent closing roadmap webinar, which is a key indicator of the mutual excitement for this deal.”
“As I’ve worked with the leadership teams of both companies throughout this process, it’s been clear this is the right move for all of us – one that will accelerate growth for both Extreme Networks and Avaya,” said Kevin Kennedy, President and CEO of Avaya. “We believe the addition of our complementary, award-winning wired, WLAN and Fabric technology will not only strengthen Extreme Networks’ competitive position but also create strategic opportunities for customers and partners. We look forward to continuing Avaya’s focus on growth within our core, industry-leading Unified Communications and Contact Center solutions.”
As part of this transaction, Extreme acquired customers, personnel and technology assets from Avaya. The acquisition strengthens Extreme’s position as a leader across the education, healthcare, and government markets with the addition of Avaya’s award winning fabric technology for highly secure, simplified access, management and control. The acquisition also strengthens Extreme’s switching portfolio, including a new family of high performance modular switches, software tools and IoT technology.
“Avaya’s networking business is a strategic fit for Extreme Networks that strengthens the company’s position in the enterprise market,” said Zeus Kerravala, analyst & founder, ZK Research. “Avaya’s strength in the core and campus perfectly complements Extreme’s market focus. Additionally the acquisition is a positive move for Extreme, Avaya and both customer bases as it creates a company with best-in-class products that span the entire enterprise network.”
Extreme continues to anticipate the transaction will be accretive to cash flow and earnings for its fiscal year 2018, which began on July 1, and expects to generate over $200 million in annualized revenue from the acquired networking assets from Avaya.
Additional Resources
Except for the historical information contained herein, the statements in this release, including those concerning Extreme's business outlook, future financial and operating results, and overall future prospects are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements speak only as of the date of this release. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: our ability to successfully integrate the Avaya networking business into the current Extreme business; failure to achieve targeted revenues and forecasted demand from end customers; a highly competitive business environment for network switching equipment; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; and a dependency on third parties for certain components and for the manufacturing of our products.
More information about potential factors that could affect Extreme's business and financial results is included in Extreme's filings with the U.S. Securities and Exchange Commission, including, without limitation, under the captions: "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors". Except as required under the U.S. federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission, Extreme Networks disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.
About Extreme Networks
Extreme Networks, Inc. (EXTR) delivers software-driven networking solutions that help IT departments everywhere deliver the ultimate business outcome: stronger connections with customers, partners and employees. Wired to wireless, desktop to data center, on premise or through the cloud, we go to extreme measures for our customers in more than 80 countries, delivering 100% insourced call-in technical support to organizations large and small, including some of the world's leading names in business, hospitality, retail, transportation and logistics, education, government, healthcare and manufacturing. Founded in 1996, Extreme is headquartered in San Jose, California . For more information, visit Extreme's website or call 1-888-257-3000.
Extreme Networks and the Extreme Networks logo are either trademarks or registered trademarks of Extreme Networks, Inc. in the United States and/or other countries. Other trademarks are the property of their respective owners.
Forward to a Friend | Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
https://www.avaya.com/investors/usa/newsroom/news-releases/2017/pr-us-170717/
Extreme Networks Completes Acquisition of the Networking Business from Avaya, Inc.
Avaya Press Release – July 17, 2017
San Jose, Calif. — July 17, 2017 – Extreme Networks, Inc. (NASDAQ: EXTR) announced today that it has completed its acquisition of Avaya Inc.’s ("Avaya") networking business. The acquisition supports the company’s growth strategy to lead the enterprise networking market with end-to-end software-driven solutions for enterprise customers from the data center to the wireless edge.
“This is an exciting day for Extreme and a strategic milestone for our company that further enables us to deliver the end-to-end networking solutions and services enterprise customers across our target vertical markets need to run their businesses,” said Ed Meyercord, President and CEO of Extreme Networks. “In addition to acquiring networking assets that complement and strengthen our capabilities, we are expanding our bench of talented and experienced employees, partners and networking customers. We’ve already seen great participation from new and existing partners and customers during our recent closing roadmap webinar, which is a key indicator of the mutual excitement for this deal.”
“As I’ve worked with the leadership teams of both companies throughout this process, it’s been clear this is the right move for all of us – one that will accelerate growth for both Extreme Networks and Avaya,” said Kevin Kennedy, President and CEO of Avaya. “We believe the addition of our complementary, award-winning wired, WLAN and Fabric technology will not only strengthen Extreme Networks’ competitive position but also create strategic opportunities for customers and partners. We look forward to continuing Avaya’s focus on growth within our core, industry-leading Unified Communications and Contact Center solutions.”
As part of this transaction, Extreme acquired customers, personnel and technology assets from Avaya. The acquisition strengthens Extreme’s position as a leader across the education, healthcare, and government markets with the addition of Avaya’s award winning fabric technology for highly secure, simplified access, management and control. The acquisition also strengthens Extreme’s switching portfolio, including a new family of high performance modular switches, software tools and IoT technology.
“Avaya’s networking business is a strategic fit for Extreme Networks that strengthens the company’s position in the enterprise market,” said Zeus Kerravala, analyst & founder, ZK Research. “Avaya’s strength in the core and campus perfectly complements Extreme’s market focus. Additionally the acquisition is a positive move for Extreme, Avaya and both customer bases as it creates a company with best-in-class products that span the entire enterprise network.”
Extreme continues to anticipate the transaction will be accretive to cash flow and earnings for its fiscal year 2018, which began on July 1, and expects to generate over $200 million in annualized revenue from the acquired networking assets from Avaya.
Additional Resources
- Extreme Acquisitions & Integrations Page
- Extreme Networks & Avaya IP Networking Strategy Webinar – Part II
Except for the historical information contained herein, the statements in this release, including those concerning Extreme's business outlook, future financial and operating results, and overall future prospects are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements speak only as of the date of this release. Actual results or events could differ materially from those anticipated in those forward-looking statements as a result of certain factors, including: our ability to successfully integrate the Avaya networking business into the current Extreme business; failure to achieve targeted revenues and forecasted demand from end customers; a highly competitive business environment for network switching equipment; the possibility that we might experience delays in the development or introduction of new technology and products; customer response to our new technology and products; and a dependency on third parties for certain components and for the manufacturing of our products.
More information about potential factors that could affect Extreme's business and financial results is included in Extreme's filings with the U.S. Securities and Exchange Commission, including, without limitation, under the captions: "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors". Except as required under the U.S. federal securities laws and the rules and regulations of the U.S. Securities and Exchange Commission, Extreme Networks disclaims any obligation to update any forward-looking statements after the date of this release, whether as a result of new information, future events, developments, changes in assumptions or otherwise.
About Extreme Networks
Extreme Networks, Inc. (EXTR) delivers software-driven networking solutions that help IT departments everywhere deliver the ultimate business outcome: stronger connections with customers, partners and employees. Wired to wireless, desktop to data center, on premise or through the cloud, we go to extreme measures for our customers in more than 80 countries, delivering 100% insourced call-in technical support to organizations large and small, including some of the world's leading names in business, hospitality, retail, transportation and logistics, education, government, healthcare and manufacturing. Founded in 1996, Extreme is headquartered in San Jose, California . For more information, visit Extreme's website or call 1-888-257-3000.
Extreme Networks and the Extreme Networks logo are either trademarks or registered trademarks of Extreme Networks, Inc. in the United States and/or other countries. Other trademarks are the property of their respective owners.
Forward to a Friend | Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
NRLN Avaya Retirees Chapter: Update Regarding Avaya Bankruptcy, July 17, 2017
Avaya is still seeking strategic alternatives which is corporate speak that has almost always meant in double secret business code “seek cover”, the future is going to get tough. It’s more corporate talk after the company senior executives have been cutting jobs and selling divisions and reducing expenses and still end up losing another $50 million that was recently reported.
On July 11, Avaya and its debtors in the Chapter 11 bankruptcy case have asked for another 60 days of extension to the September 16 time frame to allow more time in their exclusive periods to gather additional support for getting more backing with key stakeholders to support their Chapter 11 reorganization plan pursuant to Section 1121 of the Bankruptcy Code.
Avaya is looking to finalize its plan by November 15, 2017. These discussions with major debtors reflect a large portion of their overall capital structure, in an extra effort to achieve a global resolution among these groups. So far, the creditors have been rejecting the Chapter 11 reorganization approach.
When Avaya filed for bankruptcy back in January it assured customers that products and services would continue and that they wanted to continue paying the pensions and benefits. However, as the Avaya debt story has unfolded in court, the question still remains, what really comes next for Avaya after Chapter 11?
Avaya subsequently announced that global support for many of its products will be ending in 2018. As I mentioned earlier Avaya recently reported a loss of $50 million in the last quarter.
The major problem is, as we see it, that Avaya only has $3.6 billion in assets and $9.6 billion in liabilities which includes $8.2 billion in claims that are subject to compromise.
That number includes the $84 million plus that Avaya has agreed that they owe about 830 Avaya Retirees in non-qualified Supplemental Pension payments that were suspended on February 1, 2017.
Overall that says that claims are worth about 30 cents on a dollar. But some claims have greater value and will have to be paid.
If the court decides to liquidate, Avaya general claims have very little value. A healthy company would normally have a ratio of twice as many assets as liabilities.
Avaya's law firm Kirkland and Ellis filed a motion to clean up the proof of claims list for a number of reasons, check docket 773 at: https://cases.primeclerk.com/avaya/Home-DocketInfo .
Some of these 830 retirees have received notices from the prime clerk advising that Avaya is objecting to claims for the supplemental pension that they had sent in earlier. These claims have been expunged because they had sent in updated or corrected claims. These people had until Thursday July 13th to protest the removal if they wanted to do so.
As things progress (July 25, 2017 several motions will be answered) in the court regarding one widow of a retirees claim that collecting her deceased husbands 100% survivor rights to his pensions, asking the Judge to appoint her to the Creditors’ Committee and to treat her Widow’s supplemental pension as an Administrative Claim and not be treated as unsecured claims as all of the others.
The Judge has delayed his answer for more study before he answers. This ruling could pertain to Supplemental Pensioners and, maybe in all future bankruptcies.
More disturbing news is the U.S. Bankruptcy Court has also approved Avaya’s 3Q-4Q 2017 Key Employee Incentive Program that everyone thought was ill advised. See article below for details.
We are awaiting the Judge’s rulings on a few other important issues that concerns us. Also, we are still waiting for Avaya to ask or the Judge to rule that they will need for the U.S. Trustee to finally form the 1114 Health and Welfare Committee. This is a Bankruptcy Committee that deals with the Pension Benefits.
One issue is we as retirees are not normally allowed on the creditors committee because the Pension Benefit Guaranty Corporation (PBGC) represents us for our qualified pension plans, so the Health and Welfare Benefit Committee is very important to us to have positions on this committee. We will be seeking appointment of an odd number of retirees (1, 3, 5?) on this important committee if Avaya fails to continue paying for these benefits. (See excerpts below from the U.S. Code > Chapter 11 > § 1114 - Payment of Insurance Benefits to retired employees)
“The court, upon a motion by any party in interest, and after notice and a hearing, shall order the appointment of a committee of retired employees if the debtor seeks to modify or not pay the retiree benefits or if the court otherwise determines that it is appropriate, to serve as the authorized representative, under this section, of those persons receiving any retiree benefits not covered by a collective bargaining agreement. The United States trustee shall appoint any such committee.”
“A labor organization shall be, for purposes of this section, the authorized representative of those persons receiving any retiree benefits covered by any collective bargaining agreement to which that labor organization is signatory”
By law the U.S. Trustee is authorized to appoint an odd number of retirees to this Committee. That is what our next goal is, to ensure we have representation on this committee.
I would recommend that you check out the Avaya prime clerk web site below where you can track the progress of the Avaya bankruptcy in court yourself. This will provide information about the case, including access to all court documents: https://cases.primeclerk.com/avaya/ .
Here is the link to the PBGC maximum payout for 2017.
https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html
You should also visit our NRLN and the Avaya Retirees Chapter’s webpage often for additional information. To learn more about the NRLN click here: www.nrln.org.
Avaya Pension Service number is 1-844-868-6236
If you know any other Avaya Retirees that are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions please send them to the following link and ask them to join. All those that have selected the survivor benefit for their pension should have the beneficiary sign up as well to our Chapter. http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
vernlarson@cox.net or 402-203-6899
/////////////////////////////////////////////////////////////
Bankrupt Company News
By Brandy Chetsas
The U.S. Bankruptcy Court has approved Avaya’s 3Q-4Q 2017 Key Employee Incentive Program
“The Debtors request entry of an order approving the Debtors’ 3Q-4Q 2017 Key Employee Incentive Program for up to 14 key employees for the Debtors’ third and fourth fiscal quarters ending June 30 and September 30, 2017, respectively, and providing for payment an aggregate award pool of between $2.1 million and $3.2 million per quarter, subject to achievement of Threshold Adjusted EBITDA and the Emergence Milestones….The 3Q-4Q KEIP is designed to incentivize key members of management and maximize value for the estate. For example, the proposed 3Q-4Q KEIP incorporates an ‘Emergence Milestone’ component, under which 10% of an individual KEIP Participant’s total award opportunity is tied to the date by which the Debtors emerge from chapter 11, thereby further incentivizing the speedy resolution of these chapter 11 cases. Additionally, the Adjusted EBITDA threshold proposed by the Debtors’ proposed 3Q and 4Q KEIP of $178 million and $209 million, respectively, will require the Debtors to have exceeded their business plan for each of those periods by $9 million and $10 million, respectively – thereby requiring further outperformance by the KEIP participants for such goals to be achieved.”
The motion further explained, “Additionally, the proposed KEIP program is also reasonable on a market basis in absolute terms: a maximum quarterly award pool of approximately $3.2 and $2.8 million (for 3Q and 4Q, 2017 respectively) is less than 1.5% of the total Adjusted EBITDA required to earn the Target award….The 3Q-4Q KEIP will cost a total of approximately $4.6 million at threshold opportunity levels and $6.0 million at maximum opportunity levels – in each case assuming targeted performance and emergence goals are actually achieved; by comparison, the Debtors’ prepetition balance sheet includes more than $6.0 billion of funded debt. At the maximum opportunity level, the 3Q KEIP’s $3.2 million award level total reflects approximately 1.5% of the requisite Adjusted EBITDA performance of $219 million, and the 4Q KEIP’s $2.8 million award level total reflects approximately 1.1% of the requisite Adjusted EBITDA performance of $252 million; and in each case the KEIP remains self-funding given that performance is measured net of the cost of the KEIP.”"
///
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Avaya is still seeking strategic alternatives which is corporate speak that has almost always meant in double secret business code “seek cover”, the future is going to get tough. It’s more corporate talk after the company senior executives have been cutting jobs and selling divisions and reducing expenses and still end up losing another $50 million that was recently reported.
On July 11, Avaya and its debtors in the Chapter 11 bankruptcy case have asked for another 60 days of extension to the September 16 time frame to allow more time in their exclusive periods to gather additional support for getting more backing with key stakeholders to support their Chapter 11 reorganization plan pursuant to Section 1121 of the Bankruptcy Code.
Avaya is looking to finalize its plan by November 15, 2017. These discussions with major debtors reflect a large portion of their overall capital structure, in an extra effort to achieve a global resolution among these groups. So far, the creditors have been rejecting the Chapter 11 reorganization approach.
When Avaya filed for bankruptcy back in January it assured customers that products and services would continue and that they wanted to continue paying the pensions and benefits. However, as the Avaya debt story has unfolded in court, the question still remains, what really comes next for Avaya after Chapter 11?
Avaya subsequently announced that global support for many of its products will be ending in 2018. As I mentioned earlier Avaya recently reported a loss of $50 million in the last quarter.
The major problem is, as we see it, that Avaya only has $3.6 billion in assets and $9.6 billion in liabilities which includes $8.2 billion in claims that are subject to compromise.
That number includes the $84 million plus that Avaya has agreed that they owe about 830 Avaya Retirees in non-qualified Supplemental Pension payments that were suspended on February 1, 2017.
Overall that says that claims are worth about 30 cents on a dollar. But some claims have greater value and will have to be paid.
If the court decides to liquidate, Avaya general claims have very little value. A healthy company would normally have a ratio of twice as many assets as liabilities.
Avaya's law firm Kirkland and Ellis filed a motion to clean up the proof of claims list for a number of reasons, check docket 773 at: https://cases.primeclerk.com/avaya/Home-DocketInfo .
Some of these 830 retirees have received notices from the prime clerk advising that Avaya is objecting to claims for the supplemental pension that they had sent in earlier. These claims have been expunged because they had sent in updated or corrected claims. These people had until Thursday July 13th to protest the removal if they wanted to do so.
As things progress (July 25, 2017 several motions will be answered) in the court regarding one widow of a retirees claim that collecting her deceased husbands 100% survivor rights to his pensions, asking the Judge to appoint her to the Creditors’ Committee and to treat her Widow’s supplemental pension as an Administrative Claim and not be treated as unsecured claims as all of the others.
The Judge has delayed his answer for more study before he answers. This ruling could pertain to Supplemental Pensioners and, maybe in all future bankruptcies.
More disturbing news is the U.S. Bankruptcy Court has also approved Avaya’s 3Q-4Q 2017 Key Employee Incentive Program that everyone thought was ill advised. See article below for details.
We are awaiting the Judge’s rulings on a few other important issues that concerns us. Also, we are still waiting for Avaya to ask or the Judge to rule that they will need for the U.S. Trustee to finally form the 1114 Health and Welfare Committee. This is a Bankruptcy Committee that deals with the Pension Benefits.
One issue is we as retirees are not normally allowed on the creditors committee because the Pension Benefit Guaranty Corporation (PBGC) represents us for our qualified pension plans, so the Health and Welfare Benefit Committee is very important to us to have positions on this committee. We will be seeking appointment of an odd number of retirees (1, 3, 5?) on this important committee if Avaya fails to continue paying for these benefits. (See excerpts below from the U.S. Code > Chapter 11 > § 1114 - Payment of Insurance Benefits to retired employees)
“The court, upon a motion by any party in interest, and after notice and a hearing, shall order the appointment of a committee of retired employees if the debtor seeks to modify or not pay the retiree benefits or if the court otherwise determines that it is appropriate, to serve as the authorized representative, under this section, of those persons receiving any retiree benefits not covered by a collective bargaining agreement. The United States trustee shall appoint any such committee.”
“A labor organization shall be, for purposes of this section, the authorized representative of those persons receiving any retiree benefits covered by any collective bargaining agreement to which that labor organization is signatory”
By law the U.S. Trustee is authorized to appoint an odd number of retirees to this Committee. That is what our next goal is, to ensure we have representation on this committee.
I would recommend that you check out the Avaya prime clerk web site below where you can track the progress of the Avaya bankruptcy in court yourself. This will provide information about the case, including access to all court documents: https://cases.primeclerk.com/avaya/ .
Here is the link to the PBGC maximum payout for 2017.
https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee.html
You should also visit our NRLN and the Avaya Retirees Chapter’s webpage often for additional information. To learn more about the NRLN click here: www.nrln.org.
Avaya Pension Service number is 1-844-868-6236
If you know any other Avaya Retirees that are not signed up yet or any current vested Avaya employees or retired vested not yet collecting their pensions please send them to the following link and ask them to join. All those that have selected the survivor benefit for their pension should have the beneficiary sign up as well to our Chapter. http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Regards,
Vern Larson, President
NRLN Avaya Retirees Chapter
vernlarson@cox.net or 402-203-6899
/////////////////////////////////////////////////////////////
Bankrupt Company News
By Brandy Chetsas
The U.S. Bankruptcy Court has approved Avaya’s 3Q-4Q 2017 Key Employee Incentive Program
“The Debtors request entry of an order approving the Debtors’ 3Q-4Q 2017 Key Employee Incentive Program for up to 14 key employees for the Debtors’ third and fourth fiscal quarters ending June 30 and September 30, 2017, respectively, and providing for payment an aggregate award pool of between $2.1 million and $3.2 million per quarter, subject to achievement of Threshold Adjusted EBITDA and the Emergence Milestones….The 3Q-4Q KEIP is designed to incentivize key members of management and maximize value for the estate. For example, the proposed 3Q-4Q KEIP incorporates an ‘Emergence Milestone’ component, under which 10% of an individual KEIP Participant’s total award opportunity is tied to the date by which the Debtors emerge from chapter 11, thereby further incentivizing the speedy resolution of these chapter 11 cases. Additionally, the Adjusted EBITDA threshold proposed by the Debtors’ proposed 3Q and 4Q KEIP of $178 million and $209 million, respectively, will require the Debtors to have exceeded their business plan for each of those periods by $9 million and $10 million, respectively – thereby requiring further outperformance by the KEIP participants for such goals to be achieved.”
The motion further explained, “Additionally, the proposed KEIP program is also reasonable on a market basis in absolute terms: a maximum quarterly award pool of approximately $3.2 and $2.8 million (for 3Q and 4Q, 2017 respectively) is less than 1.5% of the total Adjusted EBITDA required to earn the Target award….The 3Q-4Q KEIP will cost a total of approximately $4.6 million at threshold opportunity levels and $6.0 million at maximum opportunity levels – in each case assuming targeted performance and emergence goals are actually achieved; by comparison, the Debtors’ prepetition balance sheet includes more than $6.0 billion of funded debt. At the maximum opportunity level, the 3Q KEIP’s $3.2 million award level total reflects approximately 1.5% of the requisite Adjusted EBITDA performance of $219 million, and the 4Q KEIP’s $2.8 million award level total reflects approximately 1.1% of the requisite Adjusted EBITDA performance of $252 million; and in each case the KEIP remains self-funding given that performance is measured net of the cost of the KEIP.”"
///
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
LATEST from Mr. Larson:
PLEASE READ CAREFULLY - from Monday, May 1, 2017 3:29 p.m.
PLEASE READ CAREFULLY - from Monday, May 1, 2017 3:29 p.m.
To. Avaya Retirees Chapter Members of the NRLN
Subject: Reminder Proof of Claim 410 Form - The Bar Date to file is May 8, 2017
Here is the link to the Avaya court web site, you can fill out your claims on line and submit.
https://cases.primeclerk.com/avaya/Home-DocketInfo
Avaya cancelled the payments of the Supplemental Pensions on February 1, 2017 and has stated in their Plan that these will be treated as unsecured creditors debt and will be paid out of the general recovery pool according to bankruptcy court.
However, Avaya has not canceled any other paid benefits yet. They have a reorganization/restructuring plan on file now with the court that states they want to continue the pension plans and the, OPEB (Other Post-Retirement Employment Benefits), however, the challenge is that Avaya still needs to gain a consensus of the creditors to accept the plan.
The court date for objections to their plan is not until May 25,2017, well after our Bar Date to file claims, which is May 8th, 2017.
If the Avaya restructuring/reorg. plan is not approved and Avaya is forced by the creditors to cut more expenses and they in turn cancel any benefits like your company paid group life insurance, Dental or HRA funding they will notify you in writing and you are allowed to convert your life insurance, etc. coverage so you can continue the coverage if you desire and it would be paid by yourself.
The dollar value lost to you is the cost of this insurance, these premiums costs to you to continue to provide a like benefit to your beneficiary. You can search for cost of these premiums by a local insurance agent.
The Company paid insurance we have that covers you until you die, is not a fixed term until you reach age 70. The face value declines between 66 and 70 at 10% of the original face value each year. Then it stays at the 50% amount of your salary level.
In the attachment to the 410 form you can say that in the event that should Avaya cancel the Basic Life Insurance (Dental, HRA funds, etc.) then my claim is the cost of equivalent insurance that I would have to purchase over my expected lifetime.
You should plan to put in a claim for your beneficiary (spouse) for the insurance face value. In case Avaya stops paying for these benefits.
If we submit a Proof of Claim, we at least have a claim on file just in case Avaya is forced to cancel the Basic Life Insurance or any other Post-Retirement Employment Benefits post-petition.
Subject: Instructions for form 410
Who is the Debtor? Avaya Inc.
What is the Avaya case # (17-10089)
Line 1, you are the creditor.
Line 2, answer is No.
Line 4, answer is No, if this is your first claim.
Line, 5, answer is No.
Line 6, answer is No.
Line 7, amount of Claim $.
Line 8, list what the claim is for, important. e.g. Life Insurance, HRA, Dental, Supplemental Pension, etc.
Line 9, No.
Line 10, No.
Line 11, No.
Line 12, if you cannot check any of the boxes yes, then the answer is No.
Line 13, answer is No.
Part 3, Check, I am the creditor, then sign...
Attach your Supplemental Pension W2 form that shows your yearly amount, redact you're your first 6 numbers of your Social Security number.
Use a life expectancy table to calculate how long you should live, IRS and Social Security also has a simple one (search for SSA. Life Expectancy Calculator) multiply your monthly supplemental pensions times your number of years you will live and claim that amount. The spousal survivor-ship portion can be calculated as well.
I would also attach an explanation letter which can be as simple as:
I am an Avaya retiree. I receive the following retirement benefits from Avaya: (list the benefits). This claim is made in the event that Avaya does not pay those benefits. The value of those benefits if they were to stop are $XXXXXXX.
You can go on the primeclerk site below and download the claim form and also see other forms that have already been filed.
https://cases.primeclerk.com/avaya/Home-DocketInfo
Avaya Benefits Web site: https://www.avaya.com/benefitanswers/
Avaya Pension site: https://leplb0660.portal.hewitt.com/web/avaya/login?forkPage=false
Avaya Pension Service number is 1-844-868-6236
Please sign up to join our Chapter on blue link below if you have not already done so.
Thanks, in advance for your support in creating a strong NRLN Avaya Retirees Chapter to serve as your voice on the protection of our pension and other retirement security issues.
If you know any other Avaya Retirees please send them this link below and ask them to join.
To register to our Avaya Retirees Chapter of the NRLN, this will add you to our email list and to other NRLN news.
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
If you have any questions or concerns just call me 402-203-6899 or email me and I will get back to you.
You should also check out our NRLN and the Avaya Retirees Chapter’s webpage often for new information
http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html . To learn more about the NRLN click here. www.nrln.org.
Regards,
Vern Larson, President,
NRLN Avaya Retirees Chapter
Subject: Reminder Proof of Claim 410 Form - The Bar Date to file is May 8, 2017
Here is the link to the Avaya court web site, you can fill out your claims on line and submit.
https://cases.primeclerk.com/avaya/Home-DocketInfo
Avaya cancelled the payments of the Supplemental Pensions on February 1, 2017 and has stated in their Plan that these will be treated as unsecured creditors debt and will be paid out of the general recovery pool according to bankruptcy court.
However, Avaya has not canceled any other paid benefits yet. They have a reorganization/restructuring plan on file now with the court that states they want to continue the pension plans and the, OPEB (Other Post-Retirement Employment Benefits), however, the challenge is that Avaya still needs to gain a consensus of the creditors to accept the plan.
The court date for objections to their plan is not until May 25,2017, well after our Bar Date to file claims, which is May 8th, 2017.
If the Avaya restructuring/reorg. plan is not approved and Avaya is forced by the creditors to cut more expenses and they in turn cancel any benefits like your company paid group life insurance, Dental or HRA funding they will notify you in writing and you are allowed to convert your life insurance, etc. coverage so you can continue the coverage if you desire and it would be paid by yourself.
The dollar value lost to you is the cost of this insurance, these premiums costs to you to continue to provide a like benefit to your beneficiary. You can search for cost of these premiums by a local insurance agent.
The Company paid insurance we have that covers you until you die, is not a fixed term until you reach age 70. The face value declines between 66 and 70 at 10% of the original face value each year. Then it stays at the 50% amount of your salary level.
In the attachment to the 410 form you can say that in the event that should Avaya cancel the Basic Life Insurance (Dental, HRA funds, etc.) then my claim is the cost of equivalent insurance that I would have to purchase over my expected lifetime.
You should plan to put in a claim for your beneficiary (spouse) for the insurance face value. In case Avaya stops paying for these benefits.
If we submit a Proof of Claim, we at least have a claim on file just in case Avaya is forced to cancel the Basic Life Insurance or any other Post-Retirement Employment Benefits post-petition.
Subject: Instructions for form 410
Who is the Debtor? Avaya Inc.
What is the Avaya case # (17-10089)
Line 1, you are the creditor.
Line 2, answer is No.
Line 4, answer is No, if this is your first claim.
Line, 5, answer is No.
Line 6, answer is No.
Line 7, amount of Claim $.
Line 8, list what the claim is for, important. e.g. Life Insurance, HRA, Dental, Supplemental Pension, etc.
Line 9, No.
Line 10, No.
Line 11, No.
Line 12, if you cannot check any of the boxes yes, then the answer is No.
Line 13, answer is No.
Part 3, Check, I am the creditor, then sign...
Attach your Supplemental Pension W2 form that shows your yearly amount, redact you're your first 6 numbers of your Social Security number.
Use a life expectancy table to calculate how long you should live, IRS and Social Security also has a simple one (search for SSA. Life Expectancy Calculator) multiply your monthly supplemental pensions times your number of years you will live and claim that amount. The spousal survivor-ship portion can be calculated as well.
I would also attach an explanation letter which can be as simple as:
I am an Avaya retiree. I receive the following retirement benefits from Avaya: (list the benefits). This claim is made in the event that Avaya does not pay those benefits. The value of those benefits if they were to stop are $XXXXXXX.
You can go on the primeclerk site below and download the claim form and also see other forms that have already been filed.
https://cases.primeclerk.com/avaya/Home-DocketInfo
Avaya Benefits Web site: https://www.avaya.com/benefitanswers/
Avaya Pension site: https://leplb0660.portal.hewitt.com/web/avaya/login?forkPage=false
Avaya Pension Service number is 1-844-868-6236
Please sign up to join our Chapter on blue link below if you have not already done so.
Thanks, in advance for your support in creating a strong NRLN Avaya Retirees Chapter to serve as your voice on the protection of our pension and other retirement security issues.
If you know any other Avaya Retirees please send them this link below and ask them to join.
To register to our Avaya Retirees Chapter of the NRLN, this will add you to our email list and to other NRLN news.
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
If you have any questions or concerns just call me 402-203-6899 or email me and I will get back to you.
You should also check out our NRLN and the Avaya Retirees Chapter’s webpage often for new information
http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html . To learn more about the NRLN click here. www.nrln.org.
Regards,
Vern Larson, President,
NRLN Avaya Retirees Chapter
LATEST from Mr. Larson:
PLEASE READ CAREFULLY - from Friday, April 14, 2017 2:27 p.m.
To: NRLN Avaya Retirees Chapter Members – April 14, 2017
The following is an Avaya press release announcing that it has filed its plan of reorganization with the bankruptcy court. Pay particular attention to the last two bullet points that Avaya proposes to continue to honor and maintain its qualified U.S. pension plans and honor its two bargaining agreements.
Regularly visit our Chapter’s website at: http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html. Also, urge any other Avaya retirees and employees who are not receiving my emails to sign-up at: http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form .
Vern Larson, President, Avaya Retirees Chapter
National Retirees Legislative Network
https://www.avaya.com/investors/usa/newsroom/news-releases/2017/pr-us-170413b/Avaya Files Plan of Reorganization and Disclosure StatementAvaya Investors Relations Press Release – April 13, 2017 NEW YORK, NY – April 13, 2017 – Avaya today announced that it has filed a chapter 11 plan of reorganization (the “Plan”) and related disclosure statement (“Disclosure Statement”) with the United States Bankruptcy Court for the Southern District of New York (the “Court”). The Plan outlines a path to significantly reduce Avaya’s pre-filing debt, which would strengthen the Company’s balance sheet, improve financial flexibility and position it for long-term success.
“We are pleased to have filed the Plan, which is a crucial step forward in our effort to recapitalize Avaya’s balance sheet and create a stronger and healthier company that can create even more value for our customers,” said Kevin Kennedy, Chief Executive Officer of Avaya. “We look forward to working closely with all stakeholders over the coming weeks and months to refine the Plan and build consensus.”
Under the proposed Plan, which will continue to evolve as Avaya works toward creditor consensus and confirmation by the Court, among other things, the following items are contemplated:
Kennedy added, “Our normal business operations are running well, and we continue to sign significant customer renewals and new customer contracts. In addition, the Company’s consolidated balance sheet now has more than $750 million in cash, reflecting DIP financing proceeds and positive cash flow from operations. We remain confident in our ability to maximize value for all of our stakeholders and to complete our balance sheet restructuring as soon as reasonably possible.”
This press release is not intended as solicitation for a vote on the Plan. The full terms of the Plan and Disclosure Statement, as well as the related pleadings, are available online at: https://cases.primeclerk.com/avaya.
Centerview Partners LLC and Zolfo Cooper Management, LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the Company’s restructuring counsel.
PLEASE READ CAREFULLY - from Friday, April 14, 2017 2:27 p.m.
To: NRLN Avaya Retirees Chapter Members – April 14, 2017
The following is an Avaya press release announcing that it has filed its plan of reorganization with the bankruptcy court. Pay particular attention to the last two bullet points that Avaya proposes to continue to honor and maintain its qualified U.S. pension plans and honor its two bargaining agreements.
Regularly visit our Chapter’s website at: http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html. Also, urge any other Avaya retirees and employees who are not receiving my emails to sign-up at: http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form .
Vern Larson, President, Avaya Retirees Chapter
National Retirees Legislative Network
https://www.avaya.com/investors/usa/newsroom/news-releases/2017/pr-us-170413b/Avaya Files Plan of Reorganization and Disclosure StatementAvaya Investors Relations Press Release – April 13, 2017 NEW YORK, NY – April 13, 2017 – Avaya today announced that it has filed a chapter 11 plan of reorganization (the “Plan”) and related disclosure statement (“Disclosure Statement”) with the United States Bankruptcy Court for the Southern District of New York (the “Court”). The Plan outlines a path to significantly reduce Avaya’s pre-filing debt, which would strengthen the Company’s balance sheet, improve financial flexibility and position it for long-term success.
“We are pleased to have filed the Plan, which is a crucial step forward in our effort to recapitalize Avaya’s balance sheet and create a stronger and healthier company that can create even more value for our customers,” said Kevin Kennedy, Chief Executive Officer of Avaya. “We look forward to working closely with all stakeholders over the coming weeks and months to refine the Plan and build consensus.”
Under the proposed Plan, which will continue to evolve as Avaya works toward creditor consensus and confirmation by the Court, among other things, the following items are contemplated:
- Avaya’s pre-filing debt will be reduced by more than $4 billion;
- Avaya’s restructuring will be achieved through a debt-for-equity exchange, in which certain secured creditors would acquire 100 percent of reorganized Avaya’s equity;
- Avaya’s general unsecured creditors will share pro rata in a cash pool;
- Avaya will continue to honor and maintain its qualified U.S. pension plans, which make up the vast majority of Avaya’s pension obligations, following its emergence from bankruptcy; and
- Avaya will continue to honor and assume its two collective bargaining agreements and all related agreements.
Kennedy added, “Our normal business operations are running well, and we continue to sign significant customer renewals and new customer contracts. In addition, the Company’s consolidated balance sheet now has more than $750 million in cash, reflecting DIP financing proceeds and positive cash flow from operations. We remain confident in our ability to maximize value for all of our stakeholders and to complete our balance sheet restructuring as soon as reasonably possible.”
This press release is not intended as solicitation for a vote on the Plan. The full terms of the Plan and Disclosure Statement, as well as the related pleadings, are available online at: https://cases.primeclerk.com/avaya.
Centerview Partners LLC and Zolfo Cooper Management, LLC are Avaya’s financial and restructuring advisors and Kirkland & Ellis LLP is the Company’s restructuring counsel.
LATEST from Mr.Larson
PLEASE READ CAREFULLY - from Thursday, March 26, 2017 5:40 p.m.
To: NRLN Avaya Retirees Chapter Members
Subject: Update on Avaya Bankruptcy - March 26, 2017
The Avaya Retirees Chapter of the National Retiree Legislative Network is here to serve as your voice on the protection of our pensions and other retirement security issues.
As you know Avaya has filed for Chapter 11 Bankruptcy. We have retained a Chicago Law Firm to help us represent all Avaya retirees in the Avaya Chapter 11 bankruptcy court.
Supposedly, the company is filing a plan of reorganization next week and that will give us greater insight into the supplemental pension plan and the company’s strategy going forward. That should provide us more information that will help us to answer some of the most frequently asked questions like what will happen to health care benefits and life insurance benefits post-petition.
Question: Do I have to file a proof of claim if I only have a qualified pension that will be covered by the PBGC?
You do not have to file a claim if all you have is a PBGC insured pension, that is your regular qualified pension. Again, there is no need to file a claim for a PBGC covered pension.
However, everyone who has a benefit paid by the company from its cash flow (i.e. not the qualified pension claims) like the Supplemental Pension and Life Insurance that is paid by the company, the company may elect to drop these benefits and so filing a proof of claim is necessary.
The claim amount should be the total value of the benefit to the retiree over his or her expected lifetime.
The Bar Date has been set for May 8, 2017. We have ample time to gather our information and file our claims by this deadline.
Question: Why don’t we file a class action type or blanket claim to cover all those affected?
A Class Proof of Claim must be approved by the court; we could seek to file such a claim now but the court may not approve it. Therefore, each retiree should file their own claim.
We don’t have the names of all those affected that has a Supplemental Pension yet because Avaya has not filed their schedules. Avaya has asked the court for and was granted an extension to April 21, 2017 to file their schedules. The schedules should include all of the names and contact information of all those that have Supplemental Pensions, etc.
The website that you can track the progress of the Avaya bankruptcy filing in court is https://cases.primeclerk.com/avaya/ . This will provide information about the case, including access to court documents.
Question: Can we get some help to fill out the 410 Proof of Claim Form 410?
Download the Proff of Chaim 410 Form here https://cases.primeclerk.com/avaya/. You should know all forms filed are then listed on the Docket and are public knowledge. Read the instructions for Proof of Claim, any documents that you attach ensure you redact any information that is entitled to privacy. Save your originals.
We are working with others who have already filled out their Proof of Claim 410 Form to answer some of the general questions on what should be entered on line such and such, we are putting out some of those tips that should help.
Who the Debtor is? Avaya Inc.
What is the Avaya case # ? (17-10089)
Attach your Supplemental Pension W2 form that shows your yearly amount, redact your first 6 numbers of your Social Security number. Use a life expectancy table to calculate how long you should live, multiply your monthly Supplemental Pension times your number of years you will live and claim that amount.
The spousal survivor-ship portion will be more complicated to calculate. We are still awaiting for some help from a financial advisor on that issue.
I would also attach an explanation letter which can be as simple as: I am an Avaya retiree. I receive the following retirement benefits from Avaya: (list the benefits). This claim is made in the event that Avaya does not pay those benefits.
You can go on the https://cases.primeclerk.com/avaya/ website and see other forms that have already been filed by clicking on “Claims” link at the top of the website.
If you know any other Avaya retirees who are not signed up yet to receive Avaya Retiree Chapter and NRLN emails, or any current vested Avaya employees or retired vested not yet collecting their pensions, please send them the link below and ask them to join. All those that have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter.
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Check out www.nrln.org to learn more about the NRLN and click the NRLN Chapters tab to access the Avaya Retirees Chapter’s webpage. New information is posted often.
If you have any questions or concerns just call me at 402-203-6899 or email me at vernlarson@cox.net and I will get back to you.
Regards,
Vern Larson, President, Avaya Retirees Chapter
National Retiree Legislative Network
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
PLEASE READ CAREFULLY - from Thursday, March 26, 2017 5:40 p.m.
To: NRLN Avaya Retirees Chapter Members
Subject: Update on Avaya Bankruptcy - March 26, 2017
The Avaya Retirees Chapter of the National Retiree Legislative Network is here to serve as your voice on the protection of our pensions and other retirement security issues.
As you know Avaya has filed for Chapter 11 Bankruptcy. We have retained a Chicago Law Firm to help us represent all Avaya retirees in the Avaya Chapter 11 bankruptcy court.
Supposedly, the company is filing a plan of reorganization next week and that will give us greater insight into the supplemental pension plan and the company’s strategy going forward. That should provide us more information that will help us to answer some of the most frequently asked questions like what will happen to health care benefits and life insurance benefits post-petition.
Question: Do I have to file a proof of claim if I only have a qualified pension that will be covered by the PBGC?
You do not have to file a claim if all you have is a PBGC insured pension, that is your regular qualified pension. Again, there is no need to file a claim for a PBGC covered pension.
However, everyone who has a benefit paid by the company from its cash flow (i.e. not the qualified pension claims) like the Supplemental Pension and Life Insurance that is paid by the company, the company may elect to drop these benefits and so filing a proof of claim is necessary.
The claim amount should be the total value of the benefit to the retiree over his or her expected lifetime.
The Bar Date has been set for May 8, 2017. We have ample time to gather our information and file our claims by this deadline.
Question: Why don’t we file a class action type or blanket claim to cover all those affected?
A Class Proof of Claim must be approved by the court; we could seek to file such a claim now but the court may not approve it. Therefore, each retiree should file their own claim.
We don’t have the names of all those affected that has a Supplemental Pension yet because Avaya has not filed their schedules. Avaya has asked the court for and was granted an extension to April 21, 2017 to file their schedules. The schedules should include all of the names and contact information of all those that have Supplemental Pensions, etc.
The website that you can track the progress of the Avaya bankruptcy filing in court is https://cases.primeclerk.com/avaya/ . This will provide information about the case, including access to court documents.
Question: Can we get some help to fill out the 410 Proof of Claim Form 410?
Download the Proff of Chaim 410 Form here https://cases.primeclerk.com/avaya/. You should know all forms filed are then listed on the Docket and are public knowledge. Read the instructions for Proof of Claim, any documents that you attach ensure you redact any information that is entitled to privacy. Save your originals.
We are working with others who have already filled out their Proof of Claim 410 Form to answer some of the general questions on what should be entered on line such and such, we are putting out some of those tips that should help.
Who the Debtor is? Avaya Inc.
What is the Avaya case # ? (17-10089)
Attach your Supplemental Pension W2 form that shows your yearly amount, redact your first 6 numbers of your Social Security number. Use a life expectancy table to calculate how long you should live, multiply your monthly Supplemental Pension times your number of years you will live and claim that amount.
The spousal survivor-ship portion will be more complicated to calculate. We are still awaiting for some help from a financial advisor on that issue.
I would also attach an explanation letter which can be as simple as: I am an Avaya retiree. I receive the following retirement benefits from Avaya: (list the benefits). This claim is made in the event that Avaya does not pay those benefits.
You can go on the https://cases.primeclerk.com/avaya/ website and see other forms that have already been filed by clicking on “Claims” link at the top of the website.
If you know any other Avaya retirees who are not signed up yet to receive Avaya Retiree Chapter and NRLN emails, or any current vested Avaya employees or retired vested not yet collecting their pensions, please send them the link below and ask them to join. All those that have selected the survivor benefit for their pension should have the beneficiary sign up as well to the Chapter.
http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form
Check out www.nrln.org to learn more about the NRLN and click the NRLN Chapters tab to access the Avaya Retirees Chapter’s webpage. New information is posted often.
If you have any questions or concerns just call me at 402-203-6899 or email me at vernlarson@cox.net and I will get back to you.
Regards,
Vern Larson, President, Avaya Retirees Chapter
National Retiree Legislative Network
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
LATEST from Mr.Larson
PLEASE READ CAREFULLY - from Thursday, March 17, 2017 1:40 p.m.
March 17, 2017
Working on Answers to Your Questions
I have conferred again with our attorney regarding the hundreds of emails and calls I have gotten. I have been responding to some of these that were time critical. However, we have decided that we will do a combined list of those questions and concerns and answer them in a couple of days.
We will send responses out to those Avaya Retirees Chapter members that are in our data base. Our Avaya Retirees Chapter of the NRLN is representing all Avaya Retirees, Management, Office Salaried employees and both Office and Hourly Union Represented employees.
If you have not signed up yet now is the time to join. We encourage you sign up here, click here http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form. This will add you to our Chapter’s email list so you will receive timely messages relating to the bankruptcy and other NRLN news.
The Avaya Alumni website (other sites as well, Facebook, LinkedIn – Avaya group sites, etc. are open sites, there are people that are on these sites that are not affected Avaya retirees: reporters, attorneys, etc. Certain information will not be shared on these open sites by your Chapter.
I will re-emphasize:
The bar date has not been set yet. Avaya has filed a motion to set a bar date and that motion will be heard on March 23. If this motion is granted, the bar date would be May 8, 2017.
Usually the court will not set a bar date until the debtor (AVAYA) files its schedules. Schedules list all of the creditors and the debtor’s (Avaya) statement about what is owed to those creditors. Avaya Retirees are un-secured creditors. This is where we will finally be given the names of all those affected, etc. which will allow us the ability to reach out to all Avaya Retirees.
Each of us (Avaya Retirees) would be listed with an amount owed to us under the pension plans including the non-qualified supplemental pension plan including any health care plans, etc.
The Debtor’s (Avaya) schedules were to be filed on March 22 but Avaya asked the court to extend that deadline until April 21. Whether the Court will actually set a bar date with the schedules not being on file is questionable, but the Debtor (Avaya) is asking that this be done. So, the Bar Date could be May 8, 2017 for us to all file. Or, it could be later if the court denies the motion next week.
Either way we will have ample time for all of us to file our Proof of Claim (Modified Official Form 410). We will see if we can provide more details on how to fill out the forms as well.
Several that were affected by the stopping of the Supplemental Pension payments have already filed their claims in the past two weeks. For those asking Supplemental Pensions represent an additional amount above the Internal Revenue Service compensation or benefit limit on qualified pension plans. If you were receiving a Supplemental Pension you would have known, it came as a separate check from your qualified pension plan and you would have received a separate W2 form for these payments.
Another point concerning anyone (Retiree) is the issue of those who has taken the reduced pension amount so as to provide a spouse with survivorship benefit i.e. 50% or 100%. (Should my spouse file a Form 410 Proof of Claim in addition to the claim that I file? Or, should a single claim be filed.) On the surviving spouse option, he/she has a claim – contingent claims are claims in a bankruptcy case – this one is hard to value. However, we suppose they could compare life expectancies and assuming the spouse expects to live longer figure out how much would be paid over the additional expected life period as the claim. We are going to see if we can enlist an actuary friend to give us some tables or something to help them out here.
That brings in another point. Because of this I recommend that those who have taken the survivorship option should register the spouse as a separate member of the NRLN Avaya Retiree Chapter.
We are working on the questions and answers issues and will put those out as soon as we can. Take a deep breath and know that we have plenty of time to file our claims.
Regards,
Vern Larson, President, Avaya Retirees Chapter
National Retirees Legislative Network
PLEASE READ CAREFULLY - from Thursday, March 17, 2017 1:40 p.m.
March 17, 2017
Working on Answers to Your Questions
I have conferred again with our attorney regarding the hundreds of emails and calls I have gotten. I have been responding to some of these that were time critical. However, we have decided that we will do a combined list of those questions and concerns and answer them in a couple of days.
We will send responses out to those Avaya Retirees Chapter members that are in our data base. Our Avaya Retirees Chapter of the NRLN is representing all Avaya Retirees, Management, Office Salaried employees and both Office and Hourly Union Represented employees.
If you have not signed up yet now is the time to join. We encourage you sign up here, click here http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form. This will add you to our Chapter’s email list so you will receive timely messages relating to the bankruptcy and other NRLN news.
The Avaya Alumni website (other sites as well, Facebook, LinkedIn – Avaya group sites, etc. are open sites, there are people that are on these sites that are not affected Avaya retirees: reporters, attorneys, etc. Certain information will not be shared on these open sites by your Chapter.
I will re-emphasize:
The bar date has not been set yet. Avaya has filed a motion to set a bar date and that motion will be heard on March 23. If this motion is granted, the bar date would be May 8, 2017.
Usually the court will not set a bar date until the debtor (AVAYA) files its schedules. Schedules list all of the creditors and the debtor’s (Avaya) statement about what is owed to those creditors. Avaya Retirees are un-secured creditors. This is where we will finally be given the names of all those affected, etc. which will allow us the ability to reach out to all Avaya Retirees.
Each of us (Avaya Retirees) would be listed with an amount owed to us under the pension plans including the non-qualified supplemental pension plan including any health care plans, etc.
The Debtor’s (Avaya) schedules were to be filed on March 22 but Avaya asked the court to extend that deadline until April 21. Whether the Court will actually set a bar date with the schedules not being on file is questionable, but the Debtor (Avaya) is asking that this be done. So, the Bar Date could be May 8, 2017 for us to all file. Or, it could be later if the court denies the motion next week.
Either way we will have ample time for all of us to file our Proof of Claim (Modified Official Form 410). We will see if we can provide more details on how to fill out the forms as well.
Several that were affected by the stopping of the Supplemental Pension payments have already filed their claims in the past two weeks. For those asking Supplemental Pensions represent an additional amount above the Internal Revenue Service compensation or benefit limit on qualified pension plans. If you were receiving a Supplemental Pension you would have known, it came as a separate check from your qualified pension plan and you would have received a separate W2 form for these payments.
Another point concerning anyone (Retiree) is the issue of those who has taken the reduced pension amount so as to provide a spouse with survivorship benefit i.e. 50% or 100%. (Should my spouse file a Form 410 Proof of Claim in addition to the claim that I file? Or, should a single claim be filed.) On the surviving spouse option, he/she has a claim – contingent claims are claims in a bankruptcy case – this one is hard to value. However, we suppose they could compare life expectancies and assuming the spouse expects to live longer figure out how much would be paid over the additional expected life period as the claim. We are going to see if we can enlist an actuary friend to give us some tables or something to help them out here.
That brings in another point. Because of this I recommend that those who have taken the survivorship option should register the spouse as a separate member of the NRLN Avaya Retiree Chapter.
We are working on the questions and answers issues and will put those out as soon as we can. Take a deep breath and know that we have plenty of time to file our claims.
Regards,
Vern Larson, President, Avaya Retirees Chapter
National Retirees Legislative Network
LATEST from Mr.Larson
PLEASE READ CAREFULLY - from Thursday, March 16 3:29 p.m.
From: "Vern Larson, President, NRLN Avaya Retirees Chapter" <contact@nrln.org>
Click To View Documents: Avaya Bankruptcy Claims Form.pdf (146KB);
March 16, 2017 3:29 p.m.
Every Avaya Retiree Should File a Proof of Claim with the Bankruptcy Court
I confirmed with our attorney and she recommends that everyone should file a Proof of Claim with the Avaya bankruptcy court. Folks also with health and other benefits should file as well.
The form is attached again to this email to all NRLN Avaya Retirees Chapter Members.
We all have ample time to collect and enter our data and send it to the court before the bar date addressed in the previous message below.
More instructions to follow. Here is the website where you can track the progress of the Avaya bankruptcy filing in court https://cases.primeclerk.com/avaya/. This will provide information about the case, including access to court documents.
If you know of any other Avaya retirees who are not a member yet of our NRLN Avaya Retirees Chapter please encourage them to sign up at http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form. This will add them to our Chapter’s email list and to receive other NRLN news.
Vern Larson, President, Avaya Retirees Chapter
National Retirees Legislative Network
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject: Update on the Avaya Bankruptcy Case
PLEASE READ CAREFULLY - PLEASE READ CAREFULLY - PLEASE READ CAREFULLY
Click To View Documents: Avaya Bankruptcy Claims Form.pdf (146KB);
March 15, 2017
Update on the Avaya Bankruptcy Case.
Our attorney asked me to distribute to the following to NRLN Avaya Chapter Members
Claims Bar Date: The bar date has not been set yet. The company has filed a motion to set a bar date and that motion will be heard on March 23. If the motion is granted, the bar date would be May 8, 2017. Retirees are not excluded from this date so you will have to file a proof of claim for supplemental pension payments that are not being made. Usually the court will not set a bar date until the debtor files its schedules. The schedules list all of the creditors and the debtor’s statement about what is owed to those creditors. So for example, each of you would be listed with an amount owed to you under the supplemental pension plan, any health care plan etc. The Debtor’s schedules were to be filed on March 22 but they have also asked the court to extend that deadline until April 21. Whether the Court will also set a bar date with the schedules not being on file is questionable, but the Debtor is asking that this be done.
To file the claim each retiree will have to submit the proof of claim form completed with name, address etc. Attached is the form which is largely self-explanatory. To support the claim, you should attach whatever documents you have from Avaya demonstrating that you are a participant in the plans providing pension and/or health care benefits. If you have anything from Avaya related to the total value of your payments I would also submit that with the form. I would also attach an explanation which can be as simple as:
I am a retiree. I receive the following retirement benefits from Avaya: (list the benefits). This claim is made in the event that Avaya does not pay those benefits. Since the petition date they stopped paying my supplemental pension. The value of that benefit is $X. I have been receiving (whatever benefits you are still getting). If those benefits were to stop, I would have a claim for them. The value of those benefits is $X.
Sale Motion: The Debtor has filed a motion to sell its networking business to Extreme Networks Inc. The sales price is approximately $100 million. What happens with bankruptcy sales is that there will be a marketing period for other bidders to consider buying the business and an auction. The court will then approve the winning bidder. The schedule for this process is as follows:
The buyer will not be assuming any of Avaya’s obligations to its retirees. The debtors’ motion also describes the marketing process, noting that Goldman Sachs ran a “broad marketing process” for the networking business that resulted in four potential purchasers including two strategic buyers and two financial sponsors. Of those four, two submitted written bids and were then provided access to an electronic data room. The debtors say that by November 2016, one of the potential purchasers “declined to continue bidding citing regulatory and strategic concerns” and that the debtors focused their efforts “on the only economically viable purchaser at the time,” Extreme Networks. According to the motion, the stalking horse bidding floor and APA “have already been subject to a robust market test,” and the debtors “now seek to effectuate the Sale promptly to the Stalking Horse Bidder, subject to competitive bids and Court approval.”
Key Employee Bonus Motion: The Debtor proposes to have the court approve a key employee incentive program. Under the Bankruptcy Code the Court cannot approve a bonus plan aimed at getting executives to stay with the company during the chapter 11 unless certain quite difficult conditions are met. The work-around is to propose an incentive plan which must among other provide targets that are difficult to meet. This bonus pool will be paid to the top 11 executives. I know you questioned whether we should object; the UST will likely do so. I would defer objecting at this point and let the UST do it. The unions often object as well to this and so we may see an objection from the unions as well. My reasoning is that it will be expensive to do this and driven by the facts – are the bonus targets legitimate or something the managers can easily meet. Without assistance from a financial advisor, it is difficult to mount a credible objection. Making an objection just to make noise will only hurt our credibility down the road.
Section 1114: There is no word on the health care front at this time other than Avaya’s statement at the start of the case that it intended to keep those benefits in place and pay them.
Catherine L. Steege
Jenner & Block LLP
353 N. Clark Street, Chicago, IL 60654-3456
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Click To View Documents: Avaya Bankruptcy Claims Form.pdf (146KB);
March 16, 2017 3:29 p.m.
Every Avaya Retiree Should File a Proof of Claim with the Bankruptcy Court
I confirmed with our attorney and she recommends that everyone should file a Proof of Claim with the Avaya bankruptcy court. Folks also with health and other benefits should file as well.
The form is attached again to this email to all NRLN Avaya Retirees Chapter Members.
We all have ample time to collect and enter our data and send it to the court before the bar date addressed in the previous message below.
More instructions to follow. Here is the website where you can track the progress of the Avaya bankruptcy filing in court https://cases.primeclerk.com/avaya/. This will provide information about the case, including access to court documents.
If you know of any other Avaya retirees who are not a member yet of our NRLN Avaya Retirees Chapter please encourage them to sign up at http://www.123contactform.com/form-2450889/Avaya-Contact-Registration-Form. This will add them to our Chapter’s email list and to receive other NRLN news.
Vern Larson, President, Avaya Retirees Chapter
National Retirees Legislative Network
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject: Update on the Avaya Bankruptcy Case
PLEASE READ CAREFULLY - PLEASE READ CAREFULLY - PLEASE READ CAREFULLY
Click To View Documents: Avaya Bankruptcy Claims Form.pdf (146KB);
March 15, 2017
Update on the Avaya Bankruptcy Case.
Our attorney asked me to distribute to the following to NRLN Avaya Chapter Members
Claims Bar Date: The bar date has not been set yet. The company has filed a motion to set a bar date and that motion will be heard on March 23. If the motion is granted, the bar date would be May 8, 2017. Retirees are not excluded from this date so you will have to file a proof of claim for supplemental pension payments that are not being made. Usually the court will not set a bar date until the debtor files its schedules. The schedules list all of the creditors and the debtor’s statement about what is owed to those creditors. So for example, each of you would be listed with an amount owed to you under the supplemental pension plan, any health care plan etc. The Debtor’s schedules were to be filed on March 22 but they have also asked the court to extend that deadline until April 21. Whether the Court will also set a bar date with the schedules not being on file is questionable, but the Debtor is asking that this be done.
To file the claim each retiree will have to submit the proof of claim form completed with name, address etc. Attached is the form which is largely self-explanatory. To support the claim, you should attach whatever documents you have from Avaya demonstrating that you are a participant in the plans providing pension and/or health care benefits. If you have anything from Avaya related to the total value of your payments I would also submit that with the form. I would also attach an explanation which can be as simple as:
I am a retiree. I receive the following retirement benefits from Avaya: (list the benefits). This claim is made in the event that Avaya does not pay those benefits. Since the petition date they stopped paying my supplemental pension. The value of that benefit is $X. I have been receiving (whatever benefits you are still getting). If those benefits were to stop, I would have a claim for them. The value of those benefits is $X.
Sale Motion: The Debtor has filed a motion to sell its networking business to Extreme Networks Inc. The sales price is approximately $100 million. What happens with bankruptcy sales is that there will be a marketing period for other bidders to consider buying the business and an auction. The court will then approve the winning bidder. The schedule for this process is as follows:
- March 28 at 4 p.m. EDT - bidding procedures objection deadline – if you disagree with the sales process you must object by that date
- April 4 at 10 a.m. EDT - bidding procedures hearing – at this hearing the court will approve the balance of the schedule and the rules for the auction and marketing period
- April 18 at 4 p.m. EDT - preliminary bid deadline – anyone who wants to buy the business must submit an initial bid by this date
- May 18 at 4 p.m. EDT – anyone who objects to the sale must do so by this date and final bids are due
- May 23 at 10 a.m. EDT - auction
- May 25 - sale hearing – the hearing at which the court approves or denies the proposed sale.
- Purchase price: Up to $100 million consisting of (i) at least about $68 million in cash at closing, subject to transaction costs and adjustments; (ii) up to about $22 million in assumption by the purchaser of future obligations of non-debtor entities under dark leases (with any reduction to be offset by an increase in cash); and (iii) release of up to $10 million in cash from an indemnity escrow account one year after closing.
- Bid protections: A $750,000 expense reimbursement and a $3 million termination fee “payable upon the occurrence of certain alternative transactions within one year following certain termination events.” In other words, this amount has to be paid if someone outbids Extreme Networks.
- Deposit: $10 million.
The buyer will not be assuming any of Avaya’s obligations to its retirees. The debtors’ motion also describes the marketing process, noting that Goldman Sachs ran a “broad marketing process” for the networking business that resulted in four potential purchasers including two strategic buyers and two financial sponsors. Of those four, two submitted written bids and were then provided access to an electronic data room. The debtors say that by November 2016, one of the potential purchasers “declined to continue bidding citing regulatory and strategic concerns” and that the debtors focused their efforts “on the only economically viable purchaser at the time,” Extreme Networks. According to the motion, the stalking horse bidding floor and APA “have already been subject to a robust market test,” and the debtors “now seek to effectuate the Sale promptly to the Stalking Horse Bidder, subject to competitive bids and Court approval.”
Key Employee Bonus Motion: The Debtor proposes to have the court approve a key employee incentive program. Under the Bankruptcy Code the Court cannot approve a bonus plan aimed at getting executives to stay with the company during the chapter 11 unless certain quite difficult conditions are met. The work-around is to propose an incentive plan which must among other provide targets that are difficult to meet. This bonus pool will be paid to the top 11 executives. I know you questioned whether we should object; the UST will likely do so. I would defer objecting at this point and let the UST do it. The unions often object as well to this and so we may see an objection from the unions as well. My reasoning is that it will be expensive to do this and driven by the facts – are the bonus targets legitimate or something the managers can easily meet. Without assistance from a financial advisor, it is difficult to mount a credible objection. Making an objection just to make noise will only hurt our credibility down the road.
Section 1114: There is no word on the health care front at this time other than Avaya’s statement at the start of the case that it intended to keep those benefits in place and pay them.
Catherine L. Steege
Jenner & Block LLP
353 N. Clark Street, Chicago, IL 60654-3456
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
March 14, 2017 added at 11:57 ...from an email from Vern Larson
Added Missing Paragraph from Previous Message
Comments from our Avaya Chapter 11 attorney regarding this solicitation at end of message:
“The problem here is that they make you agree to pay the money they give you back with interest if the claim is modified in any way so it is basically a high interest loan.
And these folks will often come up with ways to stick the claim back to you if their guesstimate of recovery is wrong.
What this is telling you is that they think unsecured creditors will get more than 20% on their claims.”
Respectfully submitted and regards,
Vern Larson, President, NRLN Avaya Retirees Chapter
_________________________________________________________________________________________________________________________________________
Information shared on March 13th, 2017 - by: Vern Larson, Avaya Chapter of NRLN
March 13, 2017
NRLN Avaya Retirees Chapter Members: FYI - NRLN Avaya Retirees Chapter Updates
Bar dates have been set for filing in Court. NRLN Lobbying on Capitol Hill this week. Unwanted solicitations sent to some Avaya retirees.
The Avaya Supplemental Pension Plans “Pay or Not pay, Termination” bar dates are now listed on the docket at https://cases.primeclerk.com/avaya/" these are the last filing date where one must file your Proof of Claim, objections with the court. Our Attorney and our NRLN Avaya Retiree Chapter’s plan is to file our case before the deadline probably this week. This will ultimately require money from us. I will keep everyone informed as this develops on our NRLN Chapter webpage at http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html and through direct email to our chapter members. The Executive Bonus issues will be answered at the next court date as well.
The National Retirees Legislative Network’s Leadership meeting in Washington, DC will be March 13th - 15th 2017, Over 30 retiree organization leaders and I will be In attendance. In addition to lobbying for bankruptcy reform legislation, we will be advocating protections for retirees when a company merges pension plans, merges with or is acquired by another company and when divisions of a company are spun off.
Many members of Congress do not understand the harm that often happens to retirement security on Capitol Hill. We will be lobbying for legislation to better protect retirees in corporate bankruptcies.
Current bankruptcy laws do not offer fair and equal treatment for retirees facing loss of their pension and health care benefits comparable to those afforded to secured creditors.
All of us at the meeting will be talking with Representatives and Senators or members of their staffs about making specific changes to the Federal Bankruptcy Code to clarify protections for retirees’ pensions and health care benefits after a company, such as Avaya, files for bankruptcy.
Also we will be lobbying for current prescription drug bills to import safe, lower cost medicines from Canada and for Medicare to be allowed to negotiate for the price of drugs.
With debate taking place on repeal and replacement of the Affordable Care Act, we want Congress to preserve certain parts of the ACA that have been beneficial to retirees, such as the annual wellness exam, closing the Medicare Part D donut hole on prescription drug costs and rewarding health care providers for quality improvements.
My meetings scheduled on Capitol Hill this coming week are:
Tuesday, 3/14/2017
10:15 a.m. - Rep. Jeff Fortenberry at 1514 Longworth bldg. - Patty Sheetz is the staffer.
10:45 a.m. - Rep. Don Bacon at 1516 Longworth bldg. - Jeff Kratz is the staffer.
11:30 a.m. Rep. Adrian Smith at 320 Canon Bldg. - Josh Jackson is the staffer.
2:00 p.m. - Sen. Ben Sasse at 136 Russell Bldg, - Ammon Simon
Wednesday, 3/15/2017
8:00 a.m. - The Nebraska Congressional Delegation Breakfast meeting with all four Nebraska Senators and Representatives, attended by NRLN President Bill Kadereit and Vern Larson, President, NRLN Avaya Retirees Chapter. The Nebraska Breakfast is held on Wednesdays when both the Senate and the House of Representatives are in session. The breakfast is held in the Southside Buffet located in the Dirksen Senate Office Building.
10 a.m. 181 Dirksen Bldg. with Nathan Hallford, Counsel for Senate Judiciary Committee, to talk about bankruptcy reforms.
I need to follow up with Senator Fischer's office because I have not heard back from them yet.
Alyson Parker our NRLN Executive Director will be attending a number of these meetings with me.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject: Emails sent to some Avaya retires and comments regarding this from our attorney below message.
Subject: Re: Avaya Bankruptcy
Hi there,
I hope this message finds you well. My firm specializes in purchasing bankruptcy trade claims and offering liquidity to creditors.
Given the current capital structure and valuation of Avaya, we are currently offering 20 cents on the dollar for general unsecured claims, 70 cents on the dollar for priority claims & priority portions of claims, and 75 cents on the dollar for claims against the Sierra Communication subsidiary given that it is not a guarantor to Avaya's secured debt.
A few things to consider to help you recover the most of your claim:
1.) If you have a contract with the debtor, you might be able to claim the full amount of your contact's value
2.) If the debtor received goods from you within 20 days of filing for bankruptcy, you might have a 503(b)(9) priority claim
2.) If the debtor received goods from you within 45 days of filing for bankruptcy, you might have a reclamation or priority claim
We are happy to evaluate your claim and see what we can offer you. We close very quickly and pay all claims same day via wire payment. Please don’t hesitate to reach out if you have any questions.
Best regards,
Thomas
-------------------------------
Thomas Braziel
Managing Partner
Direct: (917) 310-1206
B.E. Capital Management
205 East 42nd Street, 14th Floor, NY, NY 10017
www.becapitalmanagement.com
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Added Missing Paragraph from Previous Message
Comments from our Avaya Chapter 11 attorney regarding this solicitation at end of message:
“The problem here is that they make you agree to pay the money they give you back with interest if the claim is modified in any way so it is basically a high interest loan.
And these folks will often come up with ways to stick the claim back to you if their guesstimate of recovery is wrong.
What this is telling you is that they think unsecured creditors will get more than 20% on their claims.”
Respectfully submitted and regards,
Vern Larson, President, NRLN Avaya Retirees Chapter
_________________________________________________________________________________________________________________________________________
Information shared on March 13th, 2017 - by: Vern Larson, Avaya Chapter of NRLN
March 13, 2017
NRLN Avaya Retirees Chapter Members: FYI - NRLN Avaya Retirees Chapter Updates
Bar dates have been set for filing in Court. NRLN Lobbying on Capitol Hill this week. Unwanted solicitations sent to some Avaya retirees.
The Avaya Supplemental Pension Plans “Pay or Not pay, Termination” bar dates are now listed on the docket at https://cases.primeclerk.com/avaya/" these are the last filing date where one must file your Proof of Claim, objections with the court. Our Attorney and our NRLN Avaya Retiree Chapter’s plan is to file our case before the deadline probably this week. This will ultimately require money from us. I will keep everyone informed as this develops on our NRLN Chapter webpage at http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html and through direct email to our chapter members. The Executive Bonus issues will be answered at the next court date as well.
The National Retirees Legislative Network’s Leadership meeting in Washington, DC will be March 13th - 15th 2017, Over 30 retiree organization leaders and I will be In attendance. In addition to lobbying for bankruptcy reform legislation, we will be advocating protections for retirees when a company merges pension plans, merges with or is acquired by another company and when divisions of a company are spun off.
Many members of Congress do not understand the harm that often happens to retirement security on Capitol Hill. We will be lobbying for legislation to better protect retirees in corporate bankruptcies.
Current bankruptcy laws do not offer fair and equal treatment for retirees facing loss of their pension and health care benefits comparable to those afforded to secured creditors.
All of us at the meeting will be talking with Representatives and Senators or members of their staffs about making specific changes to the Federal Bankruptcy Code to clarify protections for retirees’ pensions and health care benefits after a company, such as Avaya, files for bankruptcy.
Also we will be lobbying for current prescription drug bills to import safe, lower cost medicines from Canada and for Medicare to be allowed to negotiate for the price of drugs.
With debate taking place on repeal and replacement of the Affordable Care Act, we want Congress to preserve certain parts of the ACA that have been beneficial to retirees, such as the annual wellness exam, closing the Medicare Part D donut hole on prescription drug costs and rewarding health care providers for quality improvements.
My meetings scheduled on Capitol Hill this coming week are:
Tuesday, 3/14/2017
10:15 a.m. - Rep. Jeff Fortenberry at 1514 Longworth bldg. - Patty Sheetz is the staffer.
10:45 a.m. - Rep. Don Bacon at 1516 Longworth bldg. - Jeff Kratz is the staffer.
11:30 a.m. Rep. Adrian Smith at 320 Canon Bldg. - Josh Jackson is the staffer.
2:00 p.m. - Sen. Ben Sasse at 136 Russell Bldg, - Ammon Simon
Wednesday, 3/15/2017
8:00 a.m. - The Nebraska Congressional Delegation Breakfast meeting with all four Nebraska Senators and Representatives, attended by NRLN President Bill Kadereit and Vern Larson, President, NRLN Avaya Retirees Chapter. The Nebraska Breakfast is held on Wednesdays when both the Senate and the House of Representatives are in session. The breakfast is held in the Southside Buffet located in the Dirksen Senate Office Building.
10 a.m. 181 Dirksen Bldg. with Nathan Hallford, Counsel for Senate Judiciary Committee, to talk about bankruptcy reforms.
I need to follow up with Senator Fischer's office because I have not heard back from them yet.
Alyson Parker our NRLN Executive Director will be attending a number of these meetings with me.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject: Emails sent to some Avaya retires and comments regarding this from our attorney below message.
Subject: Re: Avaya Bankruptcy
Hi there,
I hope this message finds you well. My firm specializes in purchasing bankruptcy trade claims and offering liquidity to creditors.
Given the current capital structure and valuation of Avaya, we are currently offering 20 cents on the dollar for general unsecured claims, 70 cents on the dollar for priority claims & priority portions of claims, and 75 cents on the dollar for claims against the Sierra Communication subsidiary given that it is not a guarantor to Avaya's secured debt.
A few things to consider to help you recover the most of your claim:
1.) If you have a contract with the debtor, you might be able to claim the full amount of your contact's value
2.) If the debtor received goods from you within 20 days of filing for bankruptcy, you might have a 503(b)(9) priority claim
2.) If the debtor received goods from you within 45 days of filing for bankruptcy, you might have a reclamation or priority claim
We are happy to evaluate your claim and see what we can offer you. We close very quickly and pay all claims same day via wire payment. Please don’t hesitate to reach out if you have any questions.
Best regards,
Thomas
-------------------------------
Thomas Braziel
Managing Partner
Direct: (917) 310-1206
B.E. Capital Management
205 East 42nd Street, 14th Floor, NY, NY 10017
www.becapitalmanagement.com
Unsubscribe | Privacy Policy | Update Profile
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Avaya Looks to Pay Executives Up to $3.7 Million in Bonuses
SOURCE: An email from Vern Larson to registered email users of NRLN Avaya Chapter
Composed and written by: By Lillian Rizzo, Wall Street Journal, March 2, 2017
Avaya Inc. is seeking to pay its chief executive and 10 other top executives up to $3.7 million in bonuses for the second quarter of this year.
While Avaya’s “overriding goal remains to complete” its reorganization, its ability to achieve this goal, as well as minimizing disruption to customers, vendors, and employees, depends on its management keeping the troubled telecommunications services company’s business stable, say court papers filed Wednesday.
If Avaya achieves these goals, then Chief Executive Kevin Kennedy, whose annual salary is $1.25 million, stands to receive $1.25 million to $1.56 million as a quarterly bonus, court papers say.
The bonus proposal, which is subject to bankruptcy-court approval, aims to pay out $3 million in bonuses to the 11 executives if the company notches $170 million in adjusted earnings before interest, taxes, depreciation and amortization for the quarter ending March 31.
If Avaya’s adjusted Ebitda for the quarter, the second of its 2017 fiscal year, rises to $205 million, then the bonus payout increases to $3.7 million, court papers show.
The request to pay these bonuses comes a week after The Wall Street Journal reported that Avaya has begun reducing pension benefits for certain retirees. Retirees received notice from the company that it wouldn’t make supplemental pension payments due in February and March, although pensions guaranteed by federal law continue to be paid.
Federal bankruptcy law allows companies leeway when it comes to honoring certain obligations in bankruptcy. As for executive bonuses, bankruptcy law says they generally must be incentive-based.
In court papers, Avaya says its Ebitda target of $170 million poses an “appropriate challenge” to executives. The company posted $205 million in adjusted Ebitda for the second quarter last year, and reaching the same benchmark this year “requires [the executives] to effectively manage through the overhang” of the bankruptcy.
Additionally, Avaya said the maximum bonus payout of $3.7 million “reflects a voluntary, 35% reduction” from prior executive bonuses.
The Santa Clara, Calif.-based company, which installs and operates corporate phone systems, is said to serve more than 200,000 direct and indirect customers, including businesses of all sizes, 911 services and government organizations, court papers show.
Avaya cited the competitive nature of its industry as justification for the bonuses.
“This need is of heightened importance here, as competitors have seized the debtors’ reorganization efforts as part of a public campaign to poach customers and undermine market confidence in [Avaya’s] restructuring efforts,” according to court papers.
Avaya sought bankruptcy protection on Jan. 19 with plans to restructure a balance sheet with about $6 billion in secured debt—a product of a 2007 leveraged buyout led by private-equity firms TPG and Silver Lake.
The company returns to the U.S. Bankruptcy Court in New York on Friday in hopes of receiving approval to tap the rest of its $725 million chapter 11 financing package. The bonus proposal will be up for review at a March 22 hearing.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
SOURCE: An email from Vern Larson to registered email users of NRLN Avaya Chapter
Composed and written by: By Lillian Rizzo, Wall Street Journal, March 2, 2017
Avaya Inc. is seeking to pay its chief executive and 10 other top executives up to $3.7 million in bonuses for the second quarter of this year.
While Avaya’s “overriding goal remains to complete” its reorganization, its ability to achieve this goal, as well as minimizing disruption to customers, vendors, and employees, depends on its management keeping the troubled telecommunications services company’s business stable, say court papers filed Wednesday.
If Avaya achieves these goals, then Chief Executive Kevin Kennedy, whose annual salary is $1.25 million, stands to receive $1.25 million to $1.56 million as a quarterly bonus, court papers say.
The bonus proposal, which is subject to bankruptcy-court approval, aims to pay out $3 million in bonuses to the 11 executives if the company notches $170 million in adjusted earnings before interest, taxes, depreciation and amortization for the quarter ending March 31.
If Avaya’s adjusted Ebitda for the quarter, the second of its 2017 fiscal year, rises to $205 million, then the bonus payout increases to $3.7 million, court papers show.
The request to pay these bonuses comes a week after The Wall Street Journal reported that Avaya has begun reducing pension benefits for certain retirees. Retirees received notice from the company that it wouldn’t make supplemental pension payments due in February and March, although pensions guaranteed by federal law continue to be paid.
Federal bankruptcy law allows companies leeway when it comes to honoring certain obligations in bankruptcy. As for executive bonuses, bankruptcy law says they generally must be incentive-based.
In court papers, Avaya says its Ebitda target of $170 million poses an “appropriate challenge” to executives. The company posted $205 million in adjusted Ebitda for the second quarter last year, and reaching the same benchmark this year “requires [the executives] to effectively manage through the overhang” of the bankruptcy.
Additionally, Avaya said the maximum bonus payout of $3.7 million “reflects a voluntary, 35% reduction” from prior executive bonuses.
The Santa Clara, Calif.-based company, which installs and operates corporate phone systems, is said to serve more than 200,000 direct and indirect customers, including businesses of all sizes, 911 services and government organizations, court papers show.
Avaya cited the competitive nature of its industry as justification for the bonuses.
“This need is of heightened importance here, as competitors have seized the debtors’ reorganization efforts as part of a public campaign to poach customers and undermine market confidence in [Avaya’s] restructuring efforts,” according to court papers.
Avaya sought bankruptcy protection on Jan. 19 with plans to restructure a balance sheet with about $6 billion in secured debt—a product of a 2007 leveraged buyout led by private-equity firms TPG and Silver Lake.
The company returns to the U.S. Bankruptcy Court in New York on Friday in hopes of receiving approval to tap the rest of its $725 million chapter 11 financing package. The bonus proposal will be up for review at a March 22 hearing.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
SOURCE of info: https://www.wsj.com/articles/bankrupt-avaya-stops-paying-some-pension-benefits-1487768401
Bankrupt Avaya Stops Paying Some Pension Benefits
By Lillian Rizzo, Wall Street Journal – Feb 22, 2017
Troubled telecom company Avaya Inc. has begun cutting off some pension
benefits for retirees, a signal that these benefits may be on the chopping
block in connection with its chapter 11 case.
In a letter to retirees, which The Wall Street Journal reviewed, the
communications company cited its recent chapter 11 filing to say that as of
Feb. 1, it would stop paying so-called supplemental pension benefits to
certain retirees until further notice. Some retirees recently received
notice that March checks also wouldn’t arrive.
“It’s very disappointing when this happens after you work for a company for
all of your life,” said 69-year-old Stephanie Gaskill, who was employed by
Avaya, once part of AT&T, for 30 years. “We dedicated our lives to it.”
An Avaya spokesman said the company continues to pay federally guaranteed
pension payments but doesn’t “have the court’s authority to make
supplemental pension payments…at this point in time.” He declined to
elaborate on Avaya’s plans for these benefits, which are among the
liabilities that companies often shed in bankruptcy.
The Santa Clara, Calif., company, which installs and operates corporate
phone systems, has gone through many iterations. What started out as
regional communications companies that were part of the Bell Telephone Co.
later became a technology division of AT&T. The unit was later spun off
from AT&T as part of a business called Lucent Technologies Inc., from which
Avaya was spun off in 2000.
Avaya sought chapter 11 protection on Jan. 19 to restructure a balance
sheet weighed down by about $6 billion in secured debt, the product of a
2007 leveraged buyout led by private-equity firms TPG and Silver Lake.
A number of these debt-fueled deals crashed into bankruptcy during and
after the financial crisis, including newspaper publisher Tribune Co.,
whose 2008 chapter 11 filing followed its $8.2 billion buyout by Sam Zell
in 2007.
Bankruptcy exposes employees and pensioners to cuts, if not the outright
loss, of benefits, only some of which are guaranteed by federal pension
laws. That means when companies file for bankruptcy protection, as Avaya
did last month, there is no safety net for the unguaranteed benefits.
Avaya’s qualified pension plans, which are backed by the Pension Benefit
Guaranty Corp., cover about 1,700 active workers and 13,000 retirees, the
company said in bankruptcy-court papers. These plans pay out about $55
million to beneficiaries per quarter. It is unknown how many of its
pensioners receive supplemental pension checks.
A company spokesman said the supplemental payments represent an
additional amount above the Internal Revenue Service compensation or
benefit limit on qualified pension plans but declined to provide further detail.
Avaya retirees interviewed by the Journal said the amount of individual
supplemental payments varied. For some, the payments represented
between 40% and 50% of their pensions. One man received $650 a month,
while another received $3,000.
Victoria Baumwald of Massachusetts, who worked for Avaya and its
predecessors for nearly 24 years, said the supplemental payments
represented 25% of her pension. She and other retirees are now
reconsidering their financial options.
“I have been thinking about accessing my Social Security at 62, rather than
66 years and four months, which was my original plan,” said Ms. Baumwald,
who will turn 61 in April. “I don’t have an ostentatious lifestyle.”
Ms. Baumwald was part of a mass head-count reduction in 2001, shortly after
Avaya was spun off from Lucent. The spinoff offered pension-related
incentives to employees to encourage them to retire early, retirees said.
She and five other retirees interviewed by the Journal worked as managers
in Avaya’s sales division took the deal.
Many retirees aren’t aware these benefits are at risk in chapter 11.
“It’s an unfortunate consequence in bankruptcy for employees and retirees,”
said attorney Debra Dandeneau, co-chair of Baker & McKenzie LLP’s global
restructuring practice. “Retiree benefits are often the low-hanging fruit
to be cut.”
Companies that file for bankruptcy may not only terminate future
supplemental pension payments but may also leave past-owed benefits only
partially repaid.
In the 2009 bankruptcy of Reader’s Digest, the publisher reported about
$82.5 million in liabilities related to nonqualified retirement and other
deferred compensation plans for former executives, officers and directors.
The company’s restructuring plan offered unsecured creditors, including
pensioners, up to 3.6 cents on the dollar. Partial payments were also made
in the chapter 11 cases of United Airlines and Delta Air Lines.
It is against this backdrop that Vern Larson, who retired from Avaya in
2006 after 45 years, is leading an group of more than 2,000 retirees who
are monitoring Avaya’s chapter 11 case.
“If the company rejects making the supplemental payments, we’ll litigate
that particular issue and do what we can to fight,” he said.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com"
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Bankrupt Avaya Stops Paying Some Pension Benefits
By Lillian Rizzo, Wall Street Journal – Feb 22, 2017
Troubled telecom company Avaya Inc. has begun cutting off some pension
benefits for retirees, a signal that these benefits may be on the chopping
block in connection with its chapter 11 case.
In a letter to retirees, which The Wall Street Journal reviewed, the
communications company cited its recent chapter 11 filing to say that as of
Feb. 1, it would stop paying so-called supplemental pension benefits to
certain retirees until further notice. Some retirees recently received
notice that March checks also wouldn’t arrive.
“It’s very disappointing when this happens after you work for a company for
all of your life,” said 69-year-old Stephanie Gaskill, who was employed by
Avaya, once part of AT&T, for 30 years. “We dedicated our lives to it.”
An Avaya spokesman said the company continues to pay federally guaranteed
pension payments but doesn’t “have the court’s authority to make
supplemental pension payments…at this point in time.” He declined to
elaborate on Avaya’s plans for these benefits, which are among the
liabilities that companies often shed in bankruptcy.
The Santa Clara, Calif., company, which installs and operates corporate
phone systems, has gone through many iterations. What started out as
regional communications companies that were part of the Bell Telephone Co.
later became a technology division of AT&T. The unit was later spun off
from AT&T as part of a business called Lucent Technologies Inc., from which
Avaya was spun off in 2000.
Avaya sought chapter 11 protection on Jan. 19 to restructure a balance
sheet weighed down by about $6 billion in secured debt, the product of a
2007 leveraged buyout led by private-equity firms TPG and Silver Lake.
A number of these debt-fueled deals crashed into bankruptcy during and
after the financial crisis, including newspaper publisher Tribune Co.,
whose 2008 chapter 11 filing followed its $8.2 billion buyout by Sam Zell
in 2007.
Bankruptcy exposes employees and pensioners to cuts, if not the outright
loss, of benefits, only some of which are guaranteed by federal pension
laws. That means when companies file for bankruptcy protection, as Avaya
did last month, there is no safety net for the unguaranteed benefits.
Avaya’s qualified pension plans, which are backed by the Pension Benefit
Guaranty Corp., cover about 1,700 active workers and 13,000 retirees, the
company said in bankruptcy-court papers. These plans pay out about $55
million to beneficiaries per quarter. It is unknown how many of its
pensioners receive supplemental pension checks.
A company spokesman said the supplemental payments represent an
additional amount above the Internal Revenue Service compensation or
benefit limit on qualified pension plans but declined to provide further detail.
Avaya retirees interviewed by the Journal said the amount of individual
supplemental payments varied. For some, the payments represented
between 40% and 50% of their pensions. One man received $650 a month,
while another received $3,000.
Victoria Baumwald of Massachusetts, who worked for Avaya and its
predecessors for nearly 24 years, said the supplemental payments
represented 25% of her pension. She and other retirees are now
reconsidering their financial options.
“I have been thinking about accessing my Social Security at 62, rather than
66 years and four months, which was my original plan,” said Ms. Baumwald,
who will turn 61 in April. “I don’t have an ostentatious lifestyle.”
Ms. Baumwald was part of a mass head-count reduction in 2001, shortly after
Avaya was spun off from Lucent. The spinoff offered pension-related
incentives to employees to encourage them to retire early, retirees said.
She and five other retirees interviewed by the Journal worked as managers
in Avaya’s sales division took the deal.
Many retirees aren’t aware these benefits are at risk in chapter 11.
“It’s an unfortunate consequence in bankruptcy for employees and retirees,”
said attorney Debra Dandeneau, co-chair of Baker & McKenzie LLP’s global
restructuring practice. “Retiree benefits are often the low-hanging fruit
to be cut.”
Companies that file for bankruptcy may not only terminate future
supplemental pension payments but may also leave past-owed benefits only
partially repaid.
In the 2009 bankruptcy of Reader’s Digest, the publisher reported about
$82.5 million in liabilities related to nonqualified retirement and other
deferred compensation plans for former executives, officers and directors.
The company’s restructuring plan offered unsecured creditors, including
pensioners, up to 3.6 cents on the dollar. Partial payments were also made
in the chapter 11 cases of United Airlines and Delta Air Lines.
It is against this backdrop that Vern Larson, who retired from Avaya in
2006 after 45 years, is leading an group of more than 2,000 retirees who
are monitoring Avaya’s chapter 11 case.
“If the company rejects making the supplemental payments, we’ll litigate
that particular issue and do what we can to fight,” he said.
Write to Lillian Rizzo at Lillian.Rizzo@wsj.com"
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Information provided on January 25, 2017
To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, Avaya Retirees Chapter
Subject: Three Items of Interest to Avaya Retirees
Here is the site that you can track the progress of the Avaya bankruptcy filing in court. This will provide information about the case, including access to court documents.
Pension Service number is 1-844-868-6236
SOURCE of information: https://cases.primeclerk.com/avaya/
//////////////////////////////////////////////////////////////////////
As required by a public company, Avaya filed two 8K's with the SEC when they announced their quarterly results. One was covering their results and one was covering the bankruptcy. You can find them here:
SEC filings are available on Avaya’s Investor Relations site at this link:
SOURCE of information: http://www.avaya.com/investors/secfilings/
If you have not signed up or know any others that have not yet joined our NRLN Avaya Chapter send them this link and ask them do so here:
SOURCE of information: http://www.123contactform.com/form-2322689/Avaya-Contact-Form
//////////////////////////////////////////////////////////////////////
The Avaya forum has received a new topic, "Represented retirees HRA agreement (non-mgt)".
The text of the post is :
"I just received a call from CWA regarding an agreement the company reached regarding our covered medical.
A letter went out on 1/18/17 to the CWA locals stating the HRA's would be funded as follows:
2017 - $6400
2018 - $6400
I do not have a copy of the letter. Contact your local for more information.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
From: Vern Larson, President, Avaya Retirees Chapter
Subject: Three Items of Interest to Avaya Retirees
Here is the site that you can track the progress of the Avaya bankruptcy filing in court. This will provide information about the case, including access to court documents.
Pension Service number is 1-844-868-6236
SOURCE of information: https://cases.primeclerk.com/avaya/
//////////////////////////////////////////////////////////////////////
As required by a public company, Avaya filed two 8K's with the SEC when they announced their quarterly results. One was covering their results and one was covering the bankruptcy. You can find them here:
SEC filings are available on Avaya’s Investor Relations site at this link:
SOURCE of information: http://www.avaya.com/investors/secfilings/
If you have not signed up or know any others that have not yet joined our NRLN Avaya Chapter send them this link and ask them do so here:
SOURCE of information: http://www.123contactform.com/form-2322689/Avaya-Contact-Form
//////////////////////////////////////////////////////////////////////
The Avaya forum has received a new topic, "Represented retirees HRA agreement (non-mgt)".
The text of the post is :
"I just received a call from CWA regarding an agreement the company reached regarding our covered medical.
A letter went out on 1/18/17 to the CWA locals stating the HRA's would be funded as follows:
2017 - $6400
2018 - $6400
I do not have a copy of the letter. Contact your local for more information.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Avaya granted $425m loan from US court
SOURCE of information: http://www.capacitymedia.com/Article/3655696/Company-Strategies/Avaya-granted-425m-loan-from-US-court.html
23 January 2017 | James Pearce
Avaya has successfully bid to tap into $425 million of a $725 million loan as it attempts to carry through a restructuring process following a bankruptcy filing. The telecoms firm filed for Chapter 11 Bankruptcy last week, facing a $600 million interest payment on debts of around $6.3 billion, according to reports. The company filed for bankruptcy after it failed in a bid to sell off its call centre business, and was unable to reach a deal with creditors.
The loan was extended by an affiliate of Citigroup earlier this year. According to Avaya lawyers, a significant portion of the $725 million was funded by existing lenders. "The company has taken a decisive step to rightsize its balance sheet," Pat Nash, one of the company's attorneys, told Judge Stuart Bernstein at the US Bankruptcy Court for the Southern District of New York.
In a statement on 20 January, Avaya CEO Kevin Kennedy said the firm was looking to restructure after an in-depth review of ways to address its capital structure.
Chapter 11 of the US Bankruptcy Code allows companies time to restructure their balance sheet and try to survive. "Reducing the company’s current debt through the chapter 11 process will best position all of Avaya’s businesses for future success," said Kennedy.
Avaya was created in 1995 from the office equipment business of Lucent Technologies – which went on to become Alcatel-Lucent and is now owned by Nokia. In 2009, after the private equity takeover, the company bought the enterprise solutions business of bankrupt Nortel for $900 million. Topics: Avaya, bankruptcy, loan, Kevin Kennedy, Alcatel Lucent
SOURCE of information: http://www.capacitymedia.com/Article/3655696/Company-Strategies/Avaya-granted-425m-loan-from-US-court.html
23 January 2017 | James Pearce
Avaya has successfully bid to tap into $425 million of a $725 million loan as it attempts to carry through a restructuring process following a bankruptcy filing. The telecoms firm filed for Chapter 11 Bankruptcy last week, facing a $600 million interest payment on debts of around $6.3 billion, according to reports. The company filed for bankruptcy after it failed in a bid to sell off its call centre business, and was unable to reach a deal with creditors.
The loan was extended by an affiliate of Citigroup earlier this year. According to Avaya lawyers, a significant portion of the $725 million was funded by existing lenders. "The company has taken a decisive step to rightsize its balance sheet," Pat Nash, one of the company's attorneys, told Judge Stuart Bernstein at the US Bankruptcy Court for the Southern District of New York.
In a statement on 20 January, Avaya CEO Kevin Kennedy said the firm was looking to restructure after an in-depth review of ways to address its capital structure.
Chapter 11 of the US Bankruptcy Code allows companies time to restructure their balance sheet and try to survive. "Reducing the company’s current debt through the chapter 11 process will best position all of Avaya’s businesses for future success," said Kennedy.
Avaya was created in 1995 from the office equipment business of Lucent Technologies – which went on to become Alcatel-Lucent and is now owned by Nokia. In 2009, after the private equity takeover, the company bought the enterprise solutions business of bankrupt Nortel for $900 million. Topics: Avaya, bankruptcy, loan, Kevin Kennedy, Alcatel Lucent
THIS LETTER BELOW by: Phi Edholm
IS WRITTEN FROM A P.O.V., person who has been thru another Chapter 11 Bankruptcy - not Avaya's.
His thoughts are what has happened to another business. We do not know what will happen!
Brand new news from NRLN site and Mr.Vern Larson:
Check often for updates on the NRLN Avaya Retirees Chapter webpage at:
SOURCE of information: http://www.nrln.org/CHAPTERS/AVAYA/avayachapter.html
SOURCE of information: http://www.ucstrategies.com/unified-communications-strategies-views/avaya-bankruptcy-a-new-dawn-or-the-beginning-of-the-end.aspx
Avaya Bankruptcy – A New Dawn or the Beginning of the End
By Phil Edholm, former Nortel Executive, UCSrategies - Jan 19, 2017
This morning, January 19th, the day before the presidential inauguration, Avaya filed for Chapter 11 bankruptcy protection. What happens now and how the company moves forward are key concerns for Avaya customers, employees, and the market in general. Having been through a somewhat similar event with Nortel in 2009, there are a few things that we probably can predict as well as some key questions.
First, Kevin Kennedy, Avaya CEO, said that in a statement that “We have conducted an extensive review of alternatives to address Avaya’s capital structure, and we believe pursuing a restructuring through Chapter 11 is the best path forward at this time. Reducing the company's current debt through the Chapter 11 process will best position all of Avaya's businesses for future success.” Clearly the $6B of debt and the $1.7B of unfunded pension liabilities have been a major drag on the company. Avaya has had to generate about $900M of EBITDA to cover debt payments, pension payments, and other costs to just be cash neutral. With revenues decreasing at about 8% per year for the last four years, it has become clear that the strategy of increasing EBITDA percentage of the decreasing revenue to cover the debt and pension load would have to fail at some point.
Prior to the bankruptcy, Avaya had investigated selling a business unit like Contact Center to raise cash, but due to a combination of business and technology integration with UC and other factors, the company has decided that was not practicable. Once it was clear there was no viable path by selling Contact Center to avoid bankruptcy, doing it sooner is better as it eliminates any further cash out for debt payments. That combined with the $600M loans due in October seems to have driven the decision.
What does this mean for Avaya customers and partners? The key question now is how the Avaya bankruptcy will proceed. Will it look like the recent Aspect reorganization that took a little over 2 months or will it look more like Nortel that took 7+ years and resulted in the company being broken up?
I lived through the Nortel bankruptcy. It was positioned as a quick path to eliminate debt, but the creditors have rights and they protested being washed out. While Chapter 11 is designed to enable continued operations and return to normal business (versus the total liquidation of Chapter 7), the creditors have claims to all of the assets and cash of the company. Those claims can result in an extended process and often it becomes a liquidation, which is what happened to Nortel. The Nortel bankruptcy is just settling now after 7+ years. The Nortel bankruptcy went from a “quick debt elimination” to a fire sale in less than 2 months. The key question is whether there is an agreed or near to agreement plan with all the creditors for how they will be treated in the process or if it is a free for all. A good example is the difference between Nortel and Aspect. Note this line in the Aspect announcement in March of last year: “In a Chapter 11 petition filed Wednesday, Aspect said a capital restructuring plan backed by its creditors would eliminate $320 million of second-lien debt and convert $60 million of first-lien debt into 100% of the reorganized company’s equity”. The key phrase is that the plan was backed by the creditors before the filing. In other words, all the creditors agreed before the bankruptcy was filed what was going to happen. Aspect emerged from Chapter 11 in a little over two months, Nortel had no plan and it took 7+ years. In reviewing the documents from Avaya, there is no reference to a plan with the creditors. This most likely means that the creditors (actually their lawyers) will go to the court requesting a plan to maximize their cash out of Avaya. The result may be an extended process to decide the right path, all while the business is languishing.
However, comparing the Nortel and Avaya bankruptcies shows that Avaya should be better positioned than Nortel to emerge from the process. While Nortel revenue was higher ($10B versus $3.7B) and the debt was lower ($4B versus $6B), Nortel was break even or burning cash, while Avaya is profitable, especially when the debt payments are removed. The Nortel bankruptcy was dramatically complicated by the fact it was international and all the creditors were included, this made for incredibly complex negotiations. In discussions with Avaya, it appears that Avaya does not plan to include the pension fund or normal business creditors as part of the bankruptcy process. Avaya will maintain and continue the pension (as di GM in their reorganization) and will continue to pay normal transactional creditors. This limits the negotiations to the senior and junior bondholders. The key question is whether this will be an extended process or if Avaya can come to a quick agreement with the creditors and move forward. In a set of FAQs for analysts and consultants, Avaya said: “The timing of the outcome is dependent on negotiations with key stakeholders and the subsequent approval of the Court, among a host of other considerations, making it difficult at this point to project a timeframe for emerging from Chapter 11, but the Company’s advisors are committed to completing this process so the Company may emerge from chapter 11 as quickly as possible.” This makes it clear that there is no plan in place and Avaya will depend on the court to define the path forward for the company. Hopefully, all the bondholders will realize that the best way to maximize their value as the new “owners” of Avaya is to expedite this process by agreeing quickly to a resolution.
In a bankruptcy, time is the enemy. Nortel Enterprise revenue dropped by almost 50% over 2009 while the bankruptcy/sale went on. Nortel Enterprise’s revenues were almost 100% product/support revenues, while Avaya has services and cloud contracts that cannot be deferred/cancelled, so the impact on Avaya should be less. However, if the product revenues decline more rapidly, it will have a major impact on the business. The reality is that the creditors see all money and assets in the company as belonging to them and they object if the “value” decreases (you are spending MY money!!!!). In the Nortel bankruptcy, there were major plans and incentives to not burn ANY cash. I assume it will be similar for Avaya (the management team will have to present an operating plan to the creditors and the court in the next weeks). As EBITDA and cash generation (without the interest payments) for Avaya are very good, unless revenues decrease, there should be minimal impacts on the organization and investment in the short term. However, if the bankruptcy is not resolved quickly, to make up for that loss in revenue and not burn cash, there will probably be significant headcount reductions in all areas. That is exactly what happened at Nortel Enterprise during the period from January to December 2009. As the CTO/CSO for the business, I was tasked to lay off over 50% of my team to meet the cost goals during that period. As my team was not directly involved with revenue (sales, delivery, etc.), the level of reductions was even higher than the average. In the Nortel bankruptcy, investing for innovation took a back seat to cash during the bankruptcy.
I suspect that the Avaya base will be even more conservative in approving Avaya purchases than the Nortel base was. They have seen this movie before. In a recent meeting, I was talking to an Avaya customer that had just done an RFP and had decided on an Avaya upgrade over a Cisco rip and replace, I am very sure that decision will be put on hold and the entire process will be revisited starting today. In fact, in a recent public financial review, Avaya indicated that 13% of their revenue was from new customers, revenue that is clearly at immediate risk.
After all of this, what does an Avaya bankruptcy mean for Avaya customers? Clearly, the path forward is now very cloudy (pun intended). However, I do believe that, regardless of the outcome of the bankruptcy, the Avaya businesses will go forward in some form and customers can be assured that their investments will continue to be supported and useable. It is highly probable that the data business will be sold quickly, while selling the contact center still has the issues of how to separate it from the UC and Communications Manger core. Customers looking to do major upgrades or expansions can look at this as either a caution or an opportunity. For those that are looking at longer range alternatives like Skype for Business, holding back on investments may be the best alternative. However, companies that see the Avaya platform as a long term strategic investment may find that negotiating upgrades and other purchases now will result in better pricing due to the pressures of the process.
A successful and vibrant Avaya is important to the industry. A wide range of choices is valuable in providing the right business communications solutions for organizations. Also, there are about 100M endpoints supported by Avaya/Nortel platforms, a significant part of global business communications installed base. And Avaya has recently demonstrated innovations in products like Breeze, Oceana and Equinox. Avaya’s success in this restructuring process is important and valuable to the industry as a whole. The bottom line is that the next few weeks/months will clearly define the path forward. Personally, I hope that Avaya will announce an agreement with their creditors by the end of February at the latest. If clarity on the Avaya path forward does not appear by Enterprise Connect, I fear the path is much more Nortel like and the outcomes may be more challenging for Avaya customers, partners, and the industry overall.
The clock has started………we should all wish the best for the Avaya team.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Vern Larson is the Avaya Retirees Chapter President of the Avaya Chapter of N.R.L.N.
an INFORMATION website portal for AVAYA retirees.
Additonal Officers (all local) are also listed on the Avaya page at the bottom on the NRLN website
Avaya Chapter page. Vern Larson - President
an INFORMATION website portal for AVAYA retirees.
Additonal Officers (all local) are also listed on the Avaya page at the bottom on the NRLN website
Avaya Chapter page. Vern Larson - President
|
Click on the BUTTON to find more information you might have received via email from NRLN. If you wish to get on the email and be notified...or contribute - contact: click on the button
Two files that might not have migrated to the NRLN website. These are download files only, and only here, unless you have received an email, and were received
in 2016 Please download... (my choice to this site, the format does not visually look good) (it's a letter) You'll need Adobe Acrobat Reader - its free - just following the instructions if you download the necessary reader below get.adobe.com/reader/https://get.adobe.com/reader/
|
Image shown below is - then President Don Peterson a PAST Avaya President when I was employed by Avaya in 2000
Video from Fortune Website link dated on January 19, 2017:
CLICK on this link or on the video image above. | ||||
December 21, 2016
Introduction letter to all: Mr.Vern Larson, Avaya Chapter President of
NRLN as posted in 2016
Introduction letter to all: Mr.Vern Larson, Avaya Chapter President of
NRLN as posted in 2016
NRLN Avaya Retirees Chapter Working to Protect What We’ve Earned
(from the website of NRLN - Avaya Chapter Retirees)
Hello Avaya Retirees,
I am Vern Larson the President of the Avaya Retirees Chapter of National Retiree Legislative Network (NRLN). We are chartered under the parent NRLN Organization with the support and help of NRLN President Bill Kadereit. The mission of the NRLN is to identify, develop and rally support for federal legislation that guarantees fair and equitable treatment of retirees and future retirees. We work to protect earned employer-sponsored pensions and benefit plans and Medicare and Social Security.
The NRLN Avaya Retirees Chapter was formed to provide a means for us to all stay connected during these challenging times of Avaya to work to ensure our pension and benefits will be protected.
Avaya has been exploring strategic alternatives to its problems for months as we as pensioners wait for the fateful news of what will be. After speaking with others in the NRLN they believe this process will give us a chance to reinforce or justify Avaya retirees’ concerns regarding our pensions but also our earned benefits such as health care and life insurance along with dental and prescription drug coverage because we and other NRLN members issues such as DuPont, Nokia and other retiree restructuring concerns and even introduce the Delphi disaster. Doing this also provides a broader story opportunity for the reporter to write about in the future.
Avaya faces a $600 million debt maturity due in October 2017. In its preliminary quarterly results the company's revenue fell to between $945 million and $955 million from about $1 billion in the same time period last year.
Avaya has been generating strong cash flow, with adjusted earnings before interest, taxes, depreciation and amortization last year reaching $900 million.
But its interest expense of more than $400 million every year has been pushing it consistently into a loss. Much of that is the result of the debt the company took on in its $8.2 billion leveraged buyout in 2007 by private equity firms Silver Lake Partners LP and TPG Capital LP.
Avaya has already announced it is being advised by Goldman Sachs Group Inc on evaluating expressions of interest in its assets, and by Centerview Partners Holdings LLC on "potential transactional alternatives" to shore up its capital structure.
Another important release from August 25, 2016
Avaya Inc.: On August 25, 2016, Moody’s Investors Service downgraded Avaya Inc.’s corporate family rating to Caa2 from Caa1, probability of default rating to Caa3-PD from Caa1-PD and its second lien notes rating to Caa3 from Caa2. According to Moody’s, the downgrade was driven by continued declines in performance, weakened liquidity, as well as concerns about the sustainability of the current capital structure. Moody’s further states that the downgrade also reflects the likelihood of a near term restructuring given the upcoming $1.15 billion in debt maturities due between October 2017 and March 2018. Moody’s Senior Analyst Matthew Jones said, “despite the overall revenue challenges, Avaya’s assets have considerable value to restructure its balance sheet around”. Jones added, “Avaya also has several divestible assets which could be sold to repay a significant proportion of creditors and still leave considerable assets to restructure remaining debt around”.
Chapter leaders listed at the end of this message are reaching out to you for your help to grow our organization. Please share this message—an email or printed copy--with all current and future retirees that you know. If you use social media, post information about our Chapter on Facebook and send out a Twitter message.
PLEASE ASK OTHER AVAYA RETIREES AND FUTURE RETIREES TO SIGN UP TO RECEIVE CHAPTER EMAILS. THEY MAY SIGN UP BY GOING TO WWW.NRLN.ORG AND CLICK THE SIGN UP LINK AT THE TOP OF THE HOME PAGE. AFTER ENTERING CONTACT INFORMATION SCROLL DOWN AND SELECT THE “AVAYA RETIREES” DESIGNATION AT THE BOTTOM OF THE DROP DOWN MENU.
(from the website of NRLN - Avaya Chapter Retirees)
Hello Avaya Retirees,
I am Vern Larson the President of the Avaya Retirees Chapter of National Retiree Legislative Network (NRLN). We are chartered under the parent NRLN Organization with the support and help of NRLN President Bill Kadereit. The mission of the NRLN is to identify, develop and rally support for federal legislation that guarantees fair and equitable treatment of retirees and future retirees. We work to protect earned employer-sponsored pensions and benefit plans and Medicare and Social Security.
The NRLN Avaya Retirees Chapter was formed to provide a means for us to all stay connected during these challenging times of Avaya to work to ensure our pension and benefits will be protected.
Avaya has been exploring strategic alternatives to its problems for months as we as pensioners wait for the fateful news of what will be. After speaking with others in the NRLN they believe this process will give us a chance to reinforce or justify Avaya retirees’ concerns regarding our pensions but also our earned benefits such as health care and life insurance along with dental and prescription drug coverage because we and other NRLN members issues such as DuPont, Nokia and other retiree restructuring concerns and even introduce the Delphi disaster. Doing this also provides a broader story opportunity for the reporter to write about in the future.
Avaya faces a $600 million debt maturity due in October 2017. In its preliminary quarterly results the company's revenue fell to between $945 million and $955 million from about $1 billion in the same time period last year.
Avaya has been generating strong cash flow, with adjusted earnings before interest, taxes, depreciation and amortization last year reaching $900 million.
But its interest expense of more than $400 million every year has been pushing it consistently into a loss. Much of that is the result of the debt the company took on in its $8.2 billion leveraged buyout in 2007 by private equity firms Silver Lake Partners LP and TPG Capital LP.
Avaya has already announced it is being advised by Goldman Sachs Group Inc on evaluating expressions of interest in its assets, and by Centerview Partners Holdings LLC on "potential transactional alternatives" to shore up its capital structure.
Another important release from August 25, 2016
Avaya Inc.: On August 25, 2016, Moody’s Investors Service downgraded Avaya Inc.’s corporate family rating to Caa2 from Caa1, probability of default rating to Caa3-PD from Caa1-PD and its second lien notes rating to Caa3 from Caa2. According to Moody’s, the downgrade was driven by continued declines in performance, weakened liquidity, as well as concerns about the sustainability of the current capital structure. Moody’s further states that the downgrade also reflects the likelihood of a near term restructuring given the upcoming $1.15 billion in debt maturities due between October 2017 and March 2018. Moody’s Senior Analyst Matthew Jones said, “despite the overall revenue challenges, Avaya’s assets have considerable value to restructure its balance sheet around”. Jones added, “Avaya also has several divestible assets which could be sold to repay a significant proportion of creditors and still leave considerable assets to restructure remaining debt around”.
Chapter leaders listed at the end of this message are reaching out to you for your help to grow our organization. Please share this message—an email or printed copy--with all current and future retirees that you know. If you use social media, post information about our Chapter on Facebook and send out a Twitter message.
PLEASE ASK OTHER AVAYA RETIREES AND FUTURE RETIREES TO SIGN UP TO RECEIVE CHAPTER EMAILS. THEY MAY SIGN UP BY GOING TO WWW.NRLN.ORG AND CLICK THE SIGN UP LINK AT THE TOP OF THE HOME PAGE. AFTER ENTERING CONTACT INFORMATION SCROLL DOWN AND SELECT THE “AVAYA RETIREES” DESIGNATION AT THE BOTTOM OF THE DROP DOWN MENU.
January 19, 2017
Two publishers articles about Avaya - Fortune and ZDNet
SOURCE of information: http://fortune.com/2017/01/19/avaya-bankruptcy/
Telecom Company Avaya Files for Bankruptcy
Reuters report in Fortune – Jan 19, 2017
Telecommunications company Avaya filed for Chapter 11 bankruptcy on Thursday to reduce its debt load of about $6.3 billion but said it would not sell its call center business, which it had tried to do last year.
The bankruptcy underscores the challenges telecommunications companies face as they transition to software and services from hardware. Early last year, Avaya had planned to sell its call center business but did not reach a deal with buyout firm Clayton, Dubilier & Rice, which had been in the lead to acquire it for about $4 billion.
Avaya said it must focus on its debt and that a sale of the call center would not maximize value for its customers or creditors. It is still negotiating deals to sell parts of its business.
The company is hashing out the terms of a restructuring deal with its creditors. The original goal was to have one in place before bankruptcy, but an agreement was not reached.
Avaya faced a deadline at the end of January in agreements with creditors to address its debt or potentially default.
The Santa Clara, California-based company has been burdened by debt stemming from an $8.2 billion buyout in 2007 by private equity firms Silver Lake Partners and TPG Capital, with $600 million coming due in October. Interest expense of more than $400 million a year has been pushing Avaya into losses.
“The new 7 and 7 Plus models attracted mostly loyal iPhone owners, rather than Android owners,” CIRP partner and co-founder Mike Levin said in a statement. “This continues the trend of new iPhone models attracting mostly repeat iPhone buyers.”
At Sept. 30, Avaya owed its pensioners $1.7 billion.
"Avaya's current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time," said Chief Executive Officer Kevin Kennedy. "Now, as a result of the terms of Avaya's debt obligations and the upcoming debt maturities, we need to recapitalize the company."
The company said an affiliate of Citigroup Inc would provide a $725 million loan to fund its operations during the reorganization, which is expected to last at least 45 to 60 days.
Avaya's revenue fell to $958 million in the fourth quarter ended on Sept. 30 from $1 billion a year earlier, according to financial results released Thursday. For the fiscal year, the company posted a net loss of $750 million.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SOURCE of information: http://www.zdnet.com/article/avaya-files-for-chapter-11-bankruptcy-wont-sell-contact-center-assets/
Avaya files for Chapter 11 bankruptcy, won't sell contact center assets
By Larry Dignan, zdnet - Jan 19, 2017Avaya said it has filed to restructure in Chapter 11 bankruptcy protection, obtained debtor-in-possession financing, and decided it won't sell off its various assets such as its contact center unit.
In a statement, Avaya noted that its foreign affiliates aren't included in the filing and will operate as normal.
Avaya said the $725 million in debtor-in-possession financing, via Citibank, is enough to minimize disruption and continue business operations. Avaya's products cover communication and messaging, video conferencing, call center, networking, and software and services.
The company said the bankruptcy restructuring will give it leeway to change its debt structure. Selling off units such as its Contact Center business would hurt its efforts to restructure debt.
CEO Kevin Kennedy said:
This is a critical step in our ongoing transformation to a successful software and services business. Avaya's current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time. Now, as a result of the terms of Avaya's debt obligations and the upcoming debt maturities, we need to recapitalize the company.
Separately, Avaya reported its fourth quarter and 2016 results. The company posted a net loss of $505 million on revenue of $958 million, down from $1 billion a year ago. For the fiscal year ending September 30, Avaya reported a net loss of $750 million on revenue of $3.7 billion. Avaya has $6 billion in debt maturing within a year.
Avaya was a spin off of Lucent Technologies in 2000 and became a private company in 2007 via a deal with Silver Lake and TPG Capital valued at $8.2 billion. In 2009, Avaya acquired Nortel Enterprise Solutions to expand into networking.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
Telecom Company Avaya Files for Bankruptcy
Reuters report in Fortune – Jan 19, 2017
Telecommunications company Avaya filed for Chapter 11 bankruptcy on Thursday to reduce its debt load of about $6.3 billion but said it would not sell its call center business, which it had tried to do last year.
The bankruptcy underscores the challenges telecommunications companies face as they transition to software and services from hardware. Early last year, Avaya had planned to sell its call center business but did not reach a deal with buyout firm Clayton, Dubilier & Rice, which had been in the lead to acquire it for about $4 billion.
Avaya said it must focus on its debt and that a sale of the call center would not maximize value for its customers or creditors. It is still negotiating deals to sell parts of its business.
The company is hashing out the terms of a restructuring deal with its creditors. The original goal was to have one in place before bankruptcy, but an agreement was not reached.
Avaya faced a deadline at the end of January in agreements with creditors to address its debt or potentially default.
The Santa Clara, California-based company has been burdened by debt stemming from an $8.2 billion buyout in 2007 by private equity firms Silver Lake Partners and TPG Capital, with $600 million coming due in October. Interest expense of more than $400 million a year has been pushing Avaya into losses.
“The new 7 and 7 Plus models attracted mostly loyal iPhone owners, rather than Android owners,” CIRP partner and co-founder Mike Levin said in a statement. “This continues the trend of new iPhone models attracting mostly repeat iPhone buyers.”
At Sept. 30, Avaya owed its pensioners $1.7 billion.
"Avaya's current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time," said Chief Executive Officer Kevin Kennedy. "Now, as a result of the terms of Avaya's debt obligations and the upcoming debt maturities, we need to recapitalize the company."
The company said an affiliate of Citigroup Inc would provide a $725 million loan to fund its operations during the reorganization, which is expected to last at least 45 to 60 days.
Avaya's revenue fell to $958 million in the fourth quarter ended on Sept. 30 from $1 billion a year earlier, according to financial results released Thursday. For the fiscal year, the company posted a net loss of $750 million.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SOURCE of information: http://www.zdnet.com/article/avaya-files-for-chapter-11-bankruptcy-wont-sell-contact-center-assets/
Avaya files for Chapter 11 bankruptcy, won't sell contact center assets
By Larry Dignan, zdnet - Jan 19, 2017Avaya said it has filed to restructure in Chapter 11 bankruptcy protection, obtained debtor-in-possession financing, and decided it won't sell off its various assets such as its contact center unit.
In a statement, Avaya noted that its foreign affiliates aren't included in the filing and will operate as normal.
Avaya said the $725 million in debtor-in-possession financing, via Citibank, is enough to minimize disruption and continue business operations. Avaya's products cover communication and messaging, video conferencing, call center, networking, and software and services.
The company said the bankruptcy restructuring will give it leeway to change its debt structure. Selling off units such as its Contact Center business would hurt its efforts to restructure debt.
CEO Kevin Kennedy said:
This is a critical step in our ongoing transformation to a successful software and services business. Avaya's current capital structure is over 10 years old and was put in place to support our business model as a hardware-focused company, which has evolved significantly since that time. Now, as a result of the terms of Avaya's debt obligations and the upcoming debt maturities, we need to recapitalize the company.
Separately, Avaya reported its fourth quarter and 2016 results. The company posted a net loss of $505 million on revenue of $958 million, down from $1 billion a year ago. For the fiscal year ending September 30, Avaya reported a net loss of $750 million on revenue of $3.7 billion. Avaya has $6 billion in debt maturing within a year.
Avaya was a spin off of Lucent Technologies in 2000 and became a private company in 2007 via a deal with Silver Lake and TPG Capital valued at $8.2 billion. In 2009, Avaya acquired Nortel Enterprise Solutions to expand into networking.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
January 4, 2017
From Vern Larson...Avaya Chapter President of NRLN with additional informaton about an article posted to the
Received this email on January 6, 2017 from Mr. Larson. Re - posting full content.. the LINK may or may not work -
click on it DIRECTLY to read the New York Post article.
(no comments by Mr. Larson - just an article from a publisher sent to those who are a notification list)
SOURCE of information: http://nypost.com/2017/01/04/multi-billion-dollar-phone-firm-deal-may-fall-apart/
Multibillion-dollar phone firm deal may fall apart
By Josh Kosman, New York Post -
Buyout firm Clayton, Dubilier & Rice is having trouble closing a multibillion-dollar acquisition of Avaya, a struggling firm that installs and manages corporate phone systems, sources told The Post.
Private equity pioneer CD&R has been entangled in a web of negotiations to buy an Avaya division. The deal could save the phone installer from a forced bankruptcy, insiders said.
Specifically, the deal calls for CD&R to buy the call-center software business, with the proceeds going to Avaya, which would then restructure the remaining business in a prepackaged bankruptcy, sources said.
“The situation is very, very fluid — this is one of the most complicated deals I have ever seen,” a source close to the talks told The Post. “CD&R has never done a restructuring or a tech deal. They are outside of their comfort zone.”
For one thing, CD&R is trying to buy the company’s call-center software business without assuming pension liabilities for any of Avaya’s 15,000 employees.
Many of Avaya’s workers are in its Morristown, NJ, location. Until last year, they had been in Basking Ridge, NJ, where Avaya’s former parent, the AT&T spinoff Lucent Technologies, had been based.
“We remain in ongoing, constructive discussions with creditors to address and improve the company’s capital structure,” an Avaya spokesman said. “We expect further developments later this month. Meanwhile, we remain fully focused on our [300,000] customers and anticipate no disruptions to our ongoing operations.”
In 2007, private equity firms TPG Capital and Silver Lake Partners bought Avaya in an $8.2 billion leveraged buyout.
They invested about $2 billion of equity and have received $600 million in proceeds. The rest of their investment will likely be wiped out, sources said.
Private equity firm Veritas Capital is still interested in buying Avaya’s call-center software business for about $4 billion and is hanging around believing CD&R’s deal may fall apart, a source said.
CD&R and Veritas did not return calls seeking comment.
Avaya was required to announce its financial results by the end of 2016 and has not. Now it has a 30-day grace period to report results.
If it does not report by February or does not receive a going-concern statement saying it is solvent, the company may then be in default on its $6 billion in loans.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
From Vern Larson...Avaya Chapter President of NRLN with additional informaton about an article posted to the
Received this email on January 6, 2017 from Mr. Larson. Re - posting full content.. the LINK may or may not work -
click on it DIRECTLY to read the New York Post article.
(no comments by Mr. Larson - just an article from a publisher sent to those who are a notification list)
SOURCE of information: http://nypost.com/2017/01/04/multi-billion-dollar-phone-firm-deal-may-fall-apart/
Multibillion-dollar phone firm deal may fall apart
By Josh Kosman, New York Post -
Buyout firm Clayton, Dubilier & Rice is having trouble closing a multibillion-dollar acquisition of Avaya, a struggling firm that installs and manages corporate phone systems, sources told The Post.
Private equity pioneer CD&R has been entangled in a web of negotiations to buy an Avaya division. The deal could save the phone installer from a forced bankruptcy, insiders said.
Specifically, the deal calls for CD&R to buy the call-center software business, with the proceeds going to Avaya, which would then restructure the remaining business in a prepackaged bankruptcy, sources said.
“The situation is very, very fluid — this is one of the most complicated deals I have ever seen,” a source close to the talks told The Post. “CD&R has never done a restructuring or a tech deal. They are outside of their comfort zone.”
For one thing, CD&R is trying to buy the company’s call-center software business without assuming pension liabilities for any of Avaya’s 15,000 employees.
Many of Avaya’s workers are in its Morristown, NJ, location. Until last year, they had been in Basking Ridge, NJ, where Avaya’s former parent, the AT&T spinoff Lucent Technologies, had been based.
“We remain in ongoing, constructive discussions with creditors to address and improve the company’s capital structure,” an Avaya spokesman said. “We expect further developments later this month. Meanwhile, we remain fully focused on our [300,000] customers and anticipate no disruptions to our ongoing operations.”
In 2007, private equity firms TPG Capital and Silver Lake Partners bought Avaya in an $8.2 billion leveraged buyout.
They invested about $2 billion of equity and have received $600 million in proceeds. The rest of their investment will likely be wiped out, sources said.
Private equity firm Veritas Capital is still interested in buying Avaya’s call-center software business for about $4 billion and is hanging around believing CD&R’s deal may fall apart, a source said.
CD&R and Veritas did not return calls seeking comment.
Avaya was required to announce its financial results by the end of 2016 and has not. Now it has a 30-day grace period to report results.
If it does not report by February or does not receive a going-concern statement saying it is solvent, the company may then be in default on its $6 billion in loans.
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
NRLN AVAYA RETIREES CHAPTER
December 21, 2016
NRLN AVAyA RETIREES CHAPTER
To: Avaya Pensioners
In the attached Wall Street Journal Article: Avaya - How an $8 Billion Tech Buyout Went Wrong, at the end of the sixth paragraph there is this sentence, “Avaya is weighing a chapter 11 bankruptcy filing to slash its $6 billion debt load”.
Toward the end, the article states: “Companies that file for chapter 11 protection sometimes seek to terminate their pension plans, putting them in the hands of the Pension Benefit Guaranty Corp., the U.S. pension insurer.”
One of the two reporters who wrote the article, Marie Beaudette, talked with me and wrote that Avaya retirees are backed by the National Retiree Legislative Network and I have been overwhelmed with calls from worried retirees. The article ended with my quote “We’re not going to go away.”
One of the reasons the Avaya Retirees Chapter was formed affiliated with the National Retirees Legislative Network is because of the NRLN’s experience of working with retirees of Delta Air Lines, General Motors, Chrysler, Delphi and Kodak when their companies filed for bankruptcy. The NRLN is familiar with the bankruptcy court process and the actions the Pension Benefits Guaranty Corporation takes when a bankruptcy results in the termination of a pension plan.
“PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private defined benefit plans - the kind that typically pay a set monthly amount at retirement. If your pension plan is insured by PBGC, and it ends without sufficient money to pay all benefits, PBGC's insurance program will pay you the benefit provided by your pension plan up to limits set by law. PBGC is not funded by general tax revenues. The funding comes from (1) insurance premiums paid by companies whose plans we protect; (2) investments; (3) assets of pension plans that we take over as trustee; and (4) recoveries in bankruptcy from the companies formerly responsible for the plans. Your insured plan remains protected even if your employer fails to pay the required premiums.
“PBGC guarantees ‘basic pension benefits’ as provided by your pension plan, subject to legal limits. These benefits include: pension benefits at normal retirement age, most early retirement benefits, disability benefits, and annuity benefits for survivors of plan participants.
“PBGC's insurance program does not cover health and welfare benefits, severance and vacation pay, life insurance, lump-sum death benefits, certain other death benefits, and other non-pension benefits. PBGC does not make cost-of-living adjustments (COLAs) to the benefits it pays.”
It should be noted that the PBGC does not cover any Supplemental Pension Annuities’ payments.
The PBGC’s maximum guarantee for participants in single-employer pension plans is based on the individual’s age on the plan’s termination date – these maximum guarantees are posted on the PBGC’s website here. We are planning to fight Avaya in Bankruptcy court to protect all of our earned employer-sponsored pensions and benefit plans that were part of our retirement.
Last week I began consulting with different legal firms that specialize in bankruptcy court procedures about retiree rights and PBGC’s role on the creditors committee. If bankruptcy happens your Chapter will immediately pursue getting a seat on the court’s Health Care Committee. This is job one and is not an easy task but we can draw on the expertise of the NRLN and its retiree organizations that have gone through the bankruptcy process.
Bill Kadereit, President of the NRLN stated “We are all very concerned about our pensions and benefits that would be affected by an AVAYA Chapter 11 bankruptcy filing. Our highest concern is that AVAYA plan participants of a terminated plan may be flabbergasted to learn that PBGC pension benefit payments are severely discounted for every month under age sixty-five (65) they are at the time of a plan termination. In 2009 Delphi retirees lost all healthcare benefits and thousands ended up with monthly PBGC pension checks 40% or more under the PBGC age 65 pension payment guarantee. The AVAYA retiree universe is skewed toward the under age 65 level, so we fear more desperation may be coming.”
Please share this email and the attached article with Avaya retirees who may not be aware of our Chapter. The hot link below will take you to a web form that you and other Avaya retirees can fill out and email back to me so additions can be made to the Chapter’s database of retirees from all the different locations around the country. The Avaya Chapter of the NLRN would appreciate for all Avaya retirees to click on the form and submit it back to us:” The more members we have the stronger we become.
We are planning to fight Avaya in Bankruptcy court to protect all of our earned employer-sponsored pensions and benefit plans that were part of our retirement.
SOURCE of information: http://www.123contactform.com/form-2322689/Avaya-Contact-Form
Go to www.nrln.org under the NRLN Logo banner you can click on Chapters-Avaya Chapter’s webpage is listed there. We will post new information as it becomes available, so check in to the NRLN web site often to get the latest news from your Chapter, also you can see our Legislative Agenda/Whitepapers, etc. on the NRLN website
Vern Larson, President,
NRLN Avaya Retirees Chapter
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601
December 21, 2016
NRLN AVAyA RETIREES CHAPTER
To: Avaya Pensioners
In the attached Wall Street Journal Article: Avaya - How an $8 Billion Tech Buyout Went Wrong, at the end of the sixth paragraph there is this sentence, “Avaya is weighing a chapter 11 bankruptcy filing to slash its $6 billion debt load”.
Toward the end, the article states: “Companies that file for chapter 11 protection sometimes seek to terminate their pension plans, putting them in the hands of the Pension Benefit Guaranty Corp., the U.S. pension insurer.”
One of the two reporters who wrote the article, Marie Beaudette, talked with me and wrote that Avaya retirees are backed by the National Retiree Legislative Network and I have been overwhelmed with calls from worried retirees. The article ended with my quote “We’re not going to go away.”
One of the reasons the Avaya Retirees Chapter was formed affiliated with the National Retirees Legislative Network is because of the NRLN’s experience of working with retirees of Delta Air Lines, General Motors, Chrysler, Delphi and Kodak when their companies filed for bankruptcy. The NRLN is familiar with the bankruptcy court process and the actions the Pension Benefits Guaranty Corporation takes when a bankruptcy results in the termination of a pension plan.
“PBGC is a federal agency created by the Employee Retirement Income Security Act of 1974 (ERISA) to protect pension benefits in private defined benefit plans - the kind that typically pay a set monthly amount at retirement. If your pension plan is insured by PBGC, and it ends without sufficient money to pay all benefits, PBGC's insurance program will pay you the benefit provided by your pension plan up to limits set by law. PBGC is not funded by general tax revenues. The funding comes from (1) insurance premiums paid by companies whose plans we protect; (2) investments; (3) assets of pension plans that we take over as trustee; and (4) recoveries in bankruptcy from the companies formerly responsible for the plans. Your insured plan remains protected even if your employer fails to pay the required premiums.
“PBGC guarantees ‘basic pension benefits’ as provided by your pension plan, subject to legal limits. These benefits include: pension benefits at normal retirement age, most early retirement benefits, disability benefits, and annuity benefits for survivors of plan participants.
“PBGC's insurance program does not cover health and welfare benefits, severance and vacation pay, life insurance, lump-sum death benefits, certain other death benefits, and other non-pension benefits. PBGC does not make cost-of-living adjustments (COLAs) to the benefits it pays.”
It should be noted that the PBGC does not cover any Supplemental Pension Annuities’ payments.
The PBGC’s maximum guarantee for participants in single-employer pension plans is based on the individual’s age on the plan’s termination date – these maximum guarantees are posted on the PBGC’s website here. We are planning to fight Avaya in Bankruptcy court to protect all of our earned employer-sponsored pensions and benefit plans that were part of our retirement.
Last week I began consulting with different legal firms that specialize in bankruptcy court procedures about retiree rights and PBGC’s role on the creditors committee. If bankruptcy happens your Chapter will immediately pursue getting a seat on the court’s Health Care Committee. This is job one and is not an easy task but we can draw on the expertise of the NRLN and its retiree organizations that have gone through the bankruptcy process.
Bill Kadereit, President of the NRLN stated “We are all very concerned about our pensions and benefits that would be affected by an AVAYA Chapter 11 bankruptcy filing. Our highest concern is that AVAYA plan participants of a terminated plan may be flabbergasted to learn that PBGC pension benefit payments are severely discounted for every month under age sixty-five (65) they are at the time of a plan termination. In 2009 Delphi retirees lost all healthcare benefits and thousands ended up with monthly PBGC pension checks 40% or more under the PBGC age 65 pension payment guarantee. The AVAYA retiree universe is skewed toward the under age 65 level, so we fear more desperation may be coming.”
Please share this email and the attached article with Avaya retirees who may not be aware of our Chapter. The hot link below will take you to a web form that you and other Avaya retirees can fill out and email back to me so additions can be made to the Chapter’s database of retirees from all the different locations around the country. The Avaya Chapter of the NLRN would appreciate for all Avaya retirees to click on the form and submit it back to us:” The more members we have the stronger we become.
We are planning to fight Avaya in Bankruptcy court to protect all of our earned employer-sponsored pensions and benefit plans that were part of our retirement.
SOURCE of information: http://www.123contactform.com/form-2322689/Avaya-Contact-Form
Go to www.nrln.org under the NRLN Logo banner you can click on Chapters-Avaya Chapter’s webpage is listed there. We will post new information as it becomes available, so check in to the NRLN web site often to get the latest news from your Chapter, also you can see our Legislative Agenda/Whitepapers, etc. on the NRLN website
Vern Larson, President,
NRLN Avaya Retirees Chapter
NRLN, 601 Pennsylvania Ave. N.W. Suite 900, South Building, Washington, D.C. 20004-2601