Post by proforkodak on Sept 16, 2012 11:56:50 GMT -5
I am UPPING the CASH cost of eliminating the NON US pension liabilities to $650 million. The FACTS supporting my cost estimate of eliminating the BOTH the US and NON US pension plan liabilities are below.
I am including the info from the recent GM pension announcement/ deal with Prudential as an illustration or template, for how Kodak can offload their entire pension obligations.
>>>" Mr. Ammann said that the pension changes announced on Friday would reduce G.M.’s total obligations, currently $134 billion, by $26 billion. Most of the cost will be paid with money the company had already set aside in its pension fund for salaried workers, but G.M. will put in an additional $4 billion from its corporate coffers.
Unionized hourly workers’ benefits are unaffected by the changes.
G.M. said that even after sending roughly $29 billion of pension assets to Prudential, it will still have $8 billion of assets in the salaried workers’ pension fund. That will leave the plan $2 billion short of the total $10 billion that the company owes its current workers for future pensions. The white-collar workers’ pension plan has been frozen already, and officials said their benefits would be unchanged"<<<
>>>" For retirees who do not accept or are ineligible for the lump sum, G.M. will purchase a group annuity contract from Prudential Insurance to pay and administer the continuing benefits.
Mr. Ammann said that G.M. was anxious to transfer the day-to-day management of its obligations to retirees to Prudential. “It allows us to focus more on our core business, which is building cars and trucks,” he said.
The lump-sum offers will be made to retirees who left G.M. between October of 1997 and December of last year. The size of the offers will vary by age, health, length of corporate service, and current pension benefits.
G.M. will spend $3.5 billion to $4.5 billion to finance the buyouts, buy the group annuities, and create the new plan for existing salaried workers. The company expects to take a charge of as much as $3.5 billion against earnings in the second half of the year for the changes. "<<< *****************************************************
Here is the ARITHMETIC:
1)Compare the end of 2008 when the Discount rate computation had not yet dropped dramatically with end of 2011
1) At then end of 2008 BEFORE the DISCOUNT rate decline caused the calculation to greatly increased the liability calculation Kodak's US plan had SURPLUS, it was OVER funded by $496 million.
a) FAIR value plan asset $5.1 Billion with $ 4.6 billion of projected obligations.
2) At the end of 2011 AFTER the DISCOUNT rate decline caused the calculation to greatly increase the liability calculation Kodak's US plan had DEFICIT of $496 million
a) FAIR value of plan assets $4.76 billion with projected obligations(liabilities) of $5.25 billion
***REMEMBER, These plans are meant to shrink in size over the lifetime of the recipients. In other words, as time passes and people pass on, the liabilities should shrink. ****
I ESTIMATE that the NEW US pension LAW will reduce the PROJECTED obligations of the US plan back to the appx. level in 2008 of $4.6 billion, while the FAIR value of the plan should be appx. the same at $4.8 billion at the end of 2011. ( the value of the investments should theoretically have increased, based upon the heavy weighting of fixed income type investments)
NON US pension plans:
1) At the end of 2008 BEFORE the DISCOUNT rate effect, the NON US plans had a deficit of $656 million.
a) Fair value was $2.35 billion, and projected obligations were $3 billion.
2) At the end of 2011 AFTER the DISCOUNT rate effect , the NON US plans had a deficit of $1.22 Billion.
a) Fair value was $2.43 billion, and projected obligations were $3.65 billion.
BOTTOM LINE: The US plan will Show a surplus, in other words it will OVER funded for the next 4 or 5 years, BECAUSE the of the US LAW that uses a 25 year AVERAGE for the DISCOUNT rate.
The liabilities of the NON US plans are greatly OVER stated because the dramatic decline in the Discount rate used. A more REALISTIC appx. of the underfunding is a number closer to $650 million.
Kodak will be able to NEGOTIATE a DEAL with the UK authorities and a potentially with an insurance company like PRUDENTIAL to to ELIMINATE the NON US pension liability for a cash payment of appx. $650 million. Kodak will probably opt to make a payment to Prudential or some other insurance company to completely take ALL the pension obligations off of Kodak's books.
Kodak should be able to also OFF load the US pension obligations to an insurance company like Prudential also without any large payment since the US plan is appx. fully funded.
Post by bullishbear32 on Sept 25, 2012 21:07:58 GMT -5
and I STILL turn to this post when i'm in doubt. Long and strong. Being busy lately has been wonderful since it has directed my attention away from the day to day pps action. I'll check back October 2nd
"860 F.2d 515 (2d Cir. 1988) (setting forth a multipronged test for determining whether the proposed consolidation meets its sole purpose - to ensure the equitable treatment of all creditors)", this is some very important wording included in this filing...Indeed very interesting...
An equity security holder is a holder of an equity security of the debtor. Examples of an equity security are a share in a corporation, an interest of a limited partner in a limited partnership, or a right to purchase, sell, or subscribe to a share, security, or interest of a share in a corporation or an interest in a limited partnership. 11 U.S.C. ß 101(16), (17). An equity security holder may vote on the plan of reorganization and may file a proof of interest, rather than a proof of claim. A proof of interest is deemed filed for any interest that appears in the debtor's schedules, unless it is scheduled as disputed, contingent, or unliquidated. 11 U.S.C. ß 1111. An equity security holder whose interest is not scheduled or scheduled as disputed, contingent, or unliquidated must file a proof of interest in order to be treated as a creditor for purposes of voting on the plan and distribution under it. Fed. R. Bankr. P. 3003(c)(2). A properly filed proof of interest supersedes any scheduling of that interest. Fed. R. Bankr. P. 3003(c)(4). Generally, most of the provisions that apply to proofs of claim, as discussed above, are also applicable to proofs of interest.
QUESTION: Doesn't that make me an "Equity Security Holder" and I can vote on POR??? I am going to write another letter this weekend.