Most of the pension obligations are already mostly or fully funded, and are safe from the bankruptcy procedure.

The problem is with the additional retirement benefits. Unlike pensions, which can be funded by purchasing annuities (where the insurance companies take the risk) medical and other benefits cannot practically be funded by buying "insurance" at the time of retirement. A company offering such retirement benefits is forced to pay them out of monies generated by current operations, plus any monies set aside by the company at the time of retirement.

Kodak may very well have set aside what seemed to be sufficient funds at the time of the affected employees' retirements, but the costs for the benefits have escalated more than expected, and the returns on monies invested have shrunk more than expected.

If Kodak was financially healthy, they would be able to cover these shortfalls as part of their recurring expenses. They are not, so they have proposed funding them at an amount slightly more than 1/2 of the expected full costs (657 million vs. 1.2 billion). If the proposal is accepted, the employees will end up not having to share the benefit of that 657 million with the other unpaid creditors.

In the US, those benefits are very expensive. I would say though that for the employees, having pensions substantially secured along with more than 1/2 of the other retirement benefits is painful but still far from being "stiffed" in the context of a bankruptcy as large as Kodak's.

Kodak's other creditors are apt to lose far more. And its shareholders (many of whom were employees) will lose vastly more.