Later this morning a bankruptcy judge in Manhattan will hear a motion by Kodak to cut the supplemental health benefits of some 16,000 retirees.
While retiree groups are asking Judge Allan Gropper to delay or kill the motion, many local retirees seem resigned.
Packed house
MVP Health Care held information sessions last Friday for Kodak retirees who receive Medicare benefits.
On May 1 those retirees could lose the Kodak benefits they get on top of their federal coverage.
Some 500 retirees crammed into a packed house at a banquet center in Bushnell’s Basin to hear about their options. Walter Stanny was one of them.
“Well it’s going to cost me money,” Stanny said. “But, hey, I’ve been retired for 20 years, so I got 20 years of benefits, so I can’t complain.”
Stanny worked at Kodak for 23 years.
If Kodak’s motion to cut health benefits is approved today, it’d cost Stanny $77.70 a month to stick with the Kodak coverage he has now.
That’s the same story for Brian Beeman, another longtime former Kodaker.
“Well, it would mean a monthly expense that we don’t have now,” said Beeman. “We could cover it, but it would cut down on other things.”
Both Beeman and Stanny fall into the category of former Kodak employees who would be affected by today’s court hearing: They both retired on or after October 1, 1991 and both are Medicare eligible.
If Kodak’s motion is approved, both Beeman and Stanny would lose their Kodak health benefits in a matter of weeks.
But like many of the retirees I spoke with at Friday’s event, Beeman doesn’t care too much if the bankruptcy judge sides with Kodak.
“They’ve been good to us, I’d hate to say that they’re turning on us now,” Beeman said. “They’ve been really good to us. We will complain, but we shouldn’t.”
Undue burden
Kodak’s motion would affect more than 16,000 retirees, according to court filings.
Bob Volpe, president of the Eastman Kodak Retirees Association (EKRA) says about half that number lives in the Rochester area.
He says many retirees are grappling with the long slide of what was once a bedrock assumption.
“The deal was, you worked here for 20 or 30 years, you retire and you’ll have these benefits for the rest of your life,” says Volpe. “Well, that game is changing.”
And EKRA is fighting it.
Volpe says Kodak’s motion to cut some health care benefits puts an undue financial burden on retirees.
He says it’s especially hard on those outside the Rochester area who don’t have access to the special rates offered by local providers.
EKRA has filed an objection to Kodak’s motion, and it’s also asking that retirees be officially represented by a formal committee.
Volpe admits belt-tightening will happen. But, he says, “If we were to get together [with Kodak] and talk, we could find more comprehensive solutions to all the benefits reductions - rather than just taking them incrementally.”
Volpe says the formation of what’s known as an “1114 committee” would give retirees an official voice in the bankruptcy proceedings.
And he’s not the only one who’s asking for its creation.
Seat at the table
Brian McTigue is a partner at the Washington, D.C. law firm representing a group of about 10 Kodak retirees.
He says the court-appointed committee could force Kodak to pay for outside experts - who would then look over Kodak’s books.
The goal: “To ascertain whether Kodak absolutely has to terminate these retiree benefits,” says McTigue, “or whether it has enough money to pay the benefits - for example, by saving money on top executives’ salaries.”
McTigue says such committees have netted tens of millions of dollars for retiree groups in past bankruptcy cases.
But he says the issue of 1114 committees is “very unsettled” in this particular court.
Still, McTigue thinks it’s unlikely the judge will immediately approve Kodak’s motion Tuesday.
“I think the judge will probably sit and think a while,” McTigue says. “What we hope he will do will be to delay ruling on Kodak’s motion to terminate benefits until a retiree committee has been created and looks at the situation.”
Both McTigue and EKRA say stopping Kodak’s motion would be a win for retirees.
Kodak says $20 million in annual savings is on the line.
Today’s hearing is scheduled to start at 11 a.m.
