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Nortel retirees fight for benefits(News & Observer, The (Raleigh, NC) Via Acquire Media NewsEdge) Mar. 7--Former employees of Nortel Networks in the Triangle are helping organize a national effort to raise $250,000 to pay a law firm to represent the ex-workers' interests in Nortel's bankruptcy case. The retirees, along with those laid off, are trying to salvage personal financial losses mounting from Nortel's bankruptcy filing in January. The company, which still employs about 2,000 people in Research Triangle Park, canceled severance payments to laid-off workers and terminated pension payouts on certain executive plans. The ex-Nortel workers began soliciting $250 donations this week with the help of the Nortel Networks Retirees Association, a Raleigh social group with 300 members that was formed in 1993. Working with other former Nortel workers around the country, the newly formed Nortel Retirees Protection Committee is hoping to sign up 1,000 people by March 22, a deadline set by the Miller & Martin law firm in Atlanta that would represent the workers. "They want to see if we're serious about it," said Bob Starkes, president of the Nortel retirees group in Raleigh. "They don't want to go forward if we're only half-committed." Jerry Aiken of Rougemont, in Durham County, stopped receiving a portion of his pension benefit this year after Nortel filed for bankruptcy protection. Aiken, 56, retired from Nortel in 2003 after 27 years in various levels of management. He wouldn't specify the amount of his financial loss, but some executives have lost several hundred thousand dollars in special pension programs for high earners that aren't guaranteed in bankruptcy proceedings. "With enough people and support, we hope to get the attorneys recognized by the bankruptcy court," Aiken said. "It puts you at the table as part of this whole process, and you at least have a voice." Aiken is alarmed that his former employer is using its dwindling reserves to pay bonuses to executives who led the company into bankruptcy, instead of paying obligations to ex-workers who made the company successful in the past. This week a federal bankruptcy judge approved Nortel's request to pay as much as $22 million in bonuses to reward 880 key employees still at the company. Nortel is also seeking to pay up to $23 million in performance bonuses to 92 senior executives. It's unusual for workers to form their own creditors' committee and hire a lawyer in a bankruptcy proceeding, said N. Hunter Wyche Jr., a Raleigh bankruptcy lawyer. Bankruptcy proceedings are highly structured, assigning priority rights to named categories of creditors. Priority creditors get paid first, ahead of workers and other unsecured creditors. Workers typically fill out a form and submit it to the bankruptcy court in a process overseen by an independent monitor. It's not clear if the bankruptcy judge would accept the Nortel Retirees Protection Committee as a party to the case. Workers are given priority status for up to $10,950 in owed wages, commissions and salaries, Wyche said. Anything they're owed above that limit is assigned a lower priority and paid out if there's money left over. Fred Moore was laid of from Nortel on Tuesday, after 24 years with the company. The Knightdale resident may not see any severance, which would have amounted to a half-year of his salary as a senior manager. He's not sure what the lawyers could do for him at this point, but he's considering paying the $250 fee. "If I did it, it would be to link arms with my former colleagues at Nortel, to right an injustice if the court decides there is one," Moore said. In his career, he laid off 16 people at Nortel before the hammer came down on him this week. Even though getting laid off was no surprise, he said getting the notice is still a psychological blow. Starkes worked at Nortel for 30 years and retired in 1999. He's not taking a financial hit as a result of the bankruptcy, but he's worried the company will be unable to pay its underfunded pension programs and that federal insurance won't cover all the losses for some workers. Federal insurance doesn't cover special "unqualified" pension plans for executives and other high earners, leaving those ex-workers without a lifeline. Starkes, 65, said the shock caused by Nortel's bankruptcy can't be overestimated. "We basically married Nortel," he said. "We're probably the last generation who married a company. You gave your all to that company. It's an emotional thing." [email protected] or 919-829-8932 To see more of The News & Observer, or to subscribe to the newspaper, go to http://www.newsobserver.com. Copyright (c) 2009, The News & Observer, Raleigh, N.C. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |