Retiree CommitteesRetiree Committees: As healthcare costs have increased, companies have increasingly turned to bankruptcy courts to reduce or eliminate retiree benefits. Generally, companies target healthcare insurance, retiree life insurance, Medicare contributions and pension benefits. Any reduction in retiree benefits can operate as a hardship to retirees. Our clients can attest to our ability to aggressively utilize the protections afforded by Section 1114 of the Bankruptcy Code to fight for the retirees, spouses and dependents that we represent. We bring an abundance of information and resources relating to healthcare coverage options, trust options to reduce tax burdens and other issues often foreign to those attorneys not familiar with this area of law. We have forged close relationships with nationally recognized financial advisors and other experts that further allow us to hit the ground running. The bankruptcy retiree committees (or 1114 committees as they are sometimes called) we have represented have indicated that our background and ability spring into action because they were appointed well after the bankruptcy process had begun.
Representative cases include a recent bankruptcy involving one of the largest automotive suppliers in the world. In that case, we were able to take an initial offer of "zero" and turn it into a settlement valued in excess of $90 million on the eve of trial. Another recent case involved a conglomerate of steel companies where we were able to obtain guaranteed lifetime distributions, a lump sum cash distribution and other benefits exceeding $30 million in value for the retirees we represented. The bankrupt companies’ original plan was to terminate all such benefits. In another case involving a multi-national automobile parts manufacturer, we were successful in protecting retiree benefits that were slated to be eliminated when one subsidiary was closed and liquidated. Using very aggressive legal arguments, we were able to obtain lifetime monthly benefits for the retirees, a lump sum payout and other benefits.
For more information, please contact practice group leaders Jon Cohen and please view the attached primer on Retiree Committee Representation.