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.