I am Pat O’Neil, a CWA member for nearly 20 years with Idearc and its predecessor companies Verizon, Bell Atlantic and NYNEX. Currently I am CWA’s representative on the Official Committee of Unsecured Creditors in Idearc’s bankruptcy case filed in the United States Bankruptcy Court in Dallas. We are representing close to 3,000 active employees and retirees.
This bankruptcy filing did not come as a surprise to the leadership of CWA. For close to a year they have been monitoring the situation very closely. On a daily basis news clips were viewed to track ongoing events. An expert outside consultant was engaged to monitor the state of Idearc and other companies with CWA-represented employees facing similar financial difficulties. A strategy was developed to protect both active and retired members.
Our leadership was in contact with the company in the days immediately preceding the bankruptcy filing. When the company did file for Chapter 11 protection on March 31, 2009, CWA immediately put the plan into motion. That afternoon and well into the evening data was gathered from local leaders and members from all over the country. An estimate of the unsecured claims of our members was calculated. That estimate turned out to be the second largest unsecured claim in the proceedings. We are potentially at risk to lose wages, commissions, accrued vacation pay, personal time, retiree insurance, grievance and arbitration claims outstanding at the time of the filing. We also have concerns over the continuation of our contracts and retiree health benefits.
The next day one of the nation’s leading bankruptcy firms, Cohen, Weiss and Simon LLP, was engaged to represent us throughout the proceedings. They have represented labor unions in many bankruptcy cases in the newspaper, airline, automotive and steel industries. On April 2nd they petitioned the court to include us on the committee and we prevailed. On April 13th the US Trustee officially selected us to be one of the six members of the committee.
Since the original bankruptcy filing, there have been numerous filings made by the company. There are a few that are of the most interest to our members.
· The company petitioned the court on March 31 to continue to have the ability to continue to pay employees wages, commissions and benefits as well as retiree benefits. It was approved by the court April 3.
· The company also petitioned to pay employee wages, commissions, benefits and retiree benefits incurred prior to the filing of the bankruptcy petition of March 31st. It was also approved by the court.
· Included in the bankruptcy statutes is a limit of $10,950 to be paid to any one individual for pre petition wages. There were 81 individuals, many of them our members, above this limit. The company petitioned to pay them the amount above the statutory limit. It was approved by the court on April 17th.
Clearly the two most important petitions were filed on April 15.
· One was to assume the twenty five Collective Bargaining Agreements.
· The other was to assume the liability for Retiree Health Benefits.
Although these are very positive signs, they must still be approved by the court. That hearing is scheduled for May 7, although that date may change. Our attorneys have been reviewing all motions filed very closely. They were present at all of the court hearings with a personal representative or via teleconferencing. It should be noted that the Unsecured Creditors Committee can and often does object to any filing of this type made by the company. This committee has yet to object to any motion of this type.
If you are interested in reviewing the official information regarding the bankruptcy, a good place to start is www.kccllc.net\idearc. It provides links to the court as well as Idearc.
The actual activities of the Unsecured Creditors Committee are subject to a confidentiality agreement, but general information is allowed to be discussed. This committee – along with the Secured Creditors – works closely with the bankruptcy judge. The reorganization plan submitted by the company will ultimately be voted on by all creditors.
The Unsecured Creditors Committee has hired outside counsel (Milbank, Tweed, Hadley & McCloy, LLP) and financial advisors (Miller Buckfire & Co, LLC) to represent the entire committee. The costs of these firms are incurred by the company. Both firms had been involved with a prior unofficial committee of unsecured creditors. They were deeply involved with various restructuring options prior to the bankruptcy filing.
To date there have been six meetings of the Committee at which we have reviewed the various motions then-pending, as well as discussed the potential outcomes of the bankruptcy. The next scheduled meeting is May 5. I will continue to update you on ongoing events as they happen. We are hopeful that this process will come to a favorable conclusion at the end of the summer. It is critical, however, that we remain diligent in our efforts to ensure that the interests of our members and retirees as well as the interests of the unorganized workers remain protected.