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  1. #121
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    I don't think it is anywhere near as good as it sounds.

    I could certainly be wrong but it seems by the way the article is worded that Kodak is proposing to pay 650+ million in claims that have already been made against those liabilities, but temporarily suspended because of the bankruptcy, and then put another 7.5 million in a bank account. If the text is correct then it appears to me that the extra 7.5 million will be good to cover about 3 weeks of expenses since Kodak estimates the cost to be about 10 million per month.

    All they are trying to do is get out from under these liabilities. Like I said, I could be reading it wrong, but I don't think so.

  2. #122

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    Well that was quick. I guess the judge approved. Health benefits to end in 2 months for retirees.

    http://news.yahoo.com/kodak-end-heal...xQpDsABFjQtDMD

  3. #123
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    "this action will pose challenges for retirees."
    Gee, ya think?
    WYSIWYG - At least that's my goal.

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  4. #124

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    ... a very scary precedent for more than just the Kodak retirees who have just been screwed.

  5. #125
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    ... a very scary precedent for more than just the Kodak retirees who have just been screwed.
    Yes, it is. As a legal precedent this is going to allow other companies to do the same thing and bail out of their health care costs by declaring bankruptcy. Then, it's a small step to make that move to keep out of bankruptcy and then one more small step to not offer it at all. While I am vary glad for the health care coverage that my current employer provides, I also know very well that they would ditch that expense in a heartbeat if they think they could get away with it. And given the grossly inflated costs of health care I can hardly blame them.

    Kodak has sometimes been the leader in business practices and not always for the better. Outsourcing of IT was one of those. IIRC they were the first. It was about a 10 or 12 year step till everyone did it and most of it had moved offshore to someplace like India.

    We are seeing another door being opened here.
    All this has happened before, and all this will happen again.

  6. #126

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    Quote Originally Posted by kb3lms View Post
    Yes, it is. As a legal precedent this is going to allow other companies to do the same thing and bail out of their health care costs by declaring bankruptcy...
    As usual, nobody reads the complete thread before posting. Also, you've confirmed that non-US people aren't the only ones who need educating on how things work here.

    Please see post #37 above:


    For virtually every US corporation that still offers retiree medical benefits, and not many are left, there's no reason to declare bankruptcy in order to terminate those benefits. It's simply a matter of announcing same. No further obligation to current retirees or those now on the payroll. None.

    The only reason Kodak had to ask permission is that, in Chapter 11, it needs permission from the court for everything. In normal circumstances, this would have been a routine communication to those affected -- benefits gone. There's no legal precedent involved.

  7. #127

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    Quote Originally Posted by RattyMouse View Post
    Well that was quick. I guess the judge approved. Health benefits to end in 2 months for retirees.

    http://news.yahoo.com/kodak-end-heal...xQpDsABFjQtDMD
    I've seen nothing elsewhere to indicate the bankruptcy court has approved or rejected Kodak's request in this matter. However, the Reuters story you linked carries a date of October 10 and appears to be shoddy journalism that presumes the request will be approved, then erroneously describes the medical benefit termination process as already in place.

  8. #128
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    Quote Originally Posted by BrianShaw View Post
    ... a very scary precedent for more than just the Kodak retirees who have just been screwed.
    In one sense, it's just Chapter 11. A firm is entitled to ask what is basically "protection from creditors" so that it can adjust its mechanisms and emerge anew as a viable business. This protects some interests (mainly jobs. Remember that all this will maybe allow many jobs to be saved at Kodak) and damages some other interests, i.e. creditors of various sorts, and competitors which have to pay and service their debt while the Chapter 11 firm got away with a free lunch.

    In the case of the medical "obligations" though, it should be noted that in case of plain and old bankruptcy (Chapter 7) creditors would probably have lost less, jobs at Kodak would be probably lost entirely, and those claiming health care benefits would in any case have lost everything as there is no legal obligation which can cause these claims to be included in the pool of credits to be satisfied.

    Considering that Kodak is in the situation they are, I don't see how this would be a bad deal. As PE points out the problem is now to see how this diminished coverage is spread out among the beneficiaries. But on average I see it as a bargain as any other outcome would mean 0 health care benefit left.
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  9. #129

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    Sal - I've seen my share of companies which deliberately bankrupted in order to raid not only health
    but pension accounts. It's a bit difficult to do that if Calif per se anymore, simply because there were
    some flagrant cases where bankrupty was performed simply by the CEO appointing himself mgr and
    paying himself more than the profits could handle (analagous to what PG&E and SoCal Edison did in
    the 90's by transferring more profits than they actually made from the utility to the parent corp);
    but in most states it's still feasible to do it this way.

  10. #130

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    Quote Originally Posted by Sal Santamaura View Post
    For virtually every US corporation that still offers retiree medical benefits, and not many are left, there's no reason to declare bankruptcy in order to terminate those benefits. It's simply a matter of announcing same. No further obligation to current retirees or those now on the payroll. None.

    The only reason Kodak had to ask permission is that, in Chapter 11, it needs permission from the court for everything. In normal circumstances, this would have been a routine communication to those affected -- benefits gone. There's no legal precedent involved.
    Your'e right Sal. Notice that I did not use the word "legal" when I wrote "precedent". That was intentional but I guess it is natural to put them together. My concern of hte precedent is that my company, as an example, has not had the balls to renege omn the promise of retiree medical coverage and survivor benefits. My fear is that this will give them the courage to do so... bankruptcy or not, and legal precedent or not.

    I love my job, need my job, and have great respect for my employer... but some of the tactics "required" to survive the tough economy are gatting brutal to us worker bees.



 

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