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Compliance November 6, 2012
Court Approves Ending Some Kodak Benefits
A federal
bankruptcy court has approved an agreement between Kodak and retirees to end
other post-employment benefits (OPEB).
Reported by Rebecca Moore
The benefits to be terminated include medical, dental, life insurance and survivor income benefits, and the proposed date of termination is December 31, 2012. (See “Kodak to End Other Post-Employment Benefits.”) This will relieve the company of $1.2 billion in OPEB liability. The proposed settlement does not impact retiree pension benefits.
Kodak will provide the Official Committee of Retirees a $7.5 million cash payment to support initial administration and benefit obligations; a $635 million unsecured claim; and a $15 million allowed administrative claim that would have priority status in Kodak’s reorganization proceedings. These funds can be used at the committee’s discretion to make payments to retirees to subsidize a limited portion of future benefit costs.
The company has also asked the court’s permission to end health care benefits for about 16,000 retirees who are older than age 65 and eligible for Medicare (see “Kodak Asks to Drop Benefits for Medicare-Eligible Retirees”).