To: All NRLN Avaya Retirees Chapter Members

From: Vern Larson, President, NRLN Avaya Retirees Chapter

Subject: Working on Sending Your Questions to PBGC and Other News – Aug. 10, 2017

I have received 100’s of emails and calls since our last posting on Monday, where the PBGC offered to answer additional questions for us from our Avaya members. I am working on culling out duplicate questions so I can send a more compact list to get the PBGC’s official response for us. Stayed tuned for more information as we receive more details.

In the court’s Docket 902 documents the company has asked for an entry of an order approving the PBGC settlement and distress termination of the Avaya Salaried Pension Plan by 5:00 p.m. prevailing Eastern Time on October 31, 2017; and substantial consummation of the Amended Plan by 5:00 p.m. prevailing Eastern Time on the earlier of (A) 30 days after entry of the order confirming the Amended Plan and (B) November 30, 2017.

The proposed PSA (Plan Support Agreement) milestones include, among other deadlines: The Plan Support Agreement Complies with Section 1125 - 23. Section 1125(b) of the Bankruptcy Code. The PSA provides that Chief Executive Officer Kevin J. Kennedy will leave the company but be retained as an advisor (consultant) to the Reorganized Debtors, the terms of which are set forth in the term sheet Exhibit B -1, and the agreement providing for the employment of James M. Chirico, Jr., as Chief Executive Officer of the Reorganized Debtors (the “Executive Employment Agreement”) the terms of which are very interesting. These are set forth in the term sheet Exhibit B-2 in the docket.

The good news it is proposed that the Hourly (Union) Pension and benefits will be continued by Avaya, NewCo and is covered in detail. It mentions that retaining the Hourly Union contractual plan would help expedite a more speedy acceptance of the new proposed PSA and possibly eliminate expensive and time consuming litigation that could delay acceptance of the overall plan to exit Chapter 11 Bankruptcy in a more timely manner.

Also, in the filings the first mention of the need to have the Bankruptcy Court US trustee form a 1114 Health and Welfare Committee, this is an important committee that we have been waiting for. This is the committee that will work on the OEPB’s (Other Employee Pension Benefits), life insurance, health insurance, health saving accounts, etc. Bankruptcy law provides retirees to actually sit on this committee. We want Avaya Retirees Chapter members on the committee.

Deadlines set for the plan.

Disclosure Statement, and (C) Disclosure Statement Motion by August 7, 2017; done.

Entry of an order approving the PSA by 5:00 p.m. Eastern Time on August 31, 2017 or as soon as the Bankruptcy Court’s calendar will permit, but in any case no later than 7 days thereafter.

Entry of an order approving the Disclosure Statement Motion by 5:00 p.m. prevailing Eastern Time on August 31, 2017 or as soon as the Bankruptcy Court’s calendar will permit, but in any case no later than 7 days thereafter.

Proposed Hearing Date and Time is less than two weeks from now: August 23, 2017 at 2:00 p.m. (prevailing Eastern Time) and Proposed Objection Deadline: August 16, 2017 at 4:00 p.m.

Here is the link to the Avaya court website.

Thanks to Chapter Members

Thanks in advance to all of you for your support in creating a strong NRLN Avaya Retirees Chapter to serve as your voice on the protection of our pension and other retirement security issues.

If you know any other Avaya Retirees or any current vested Avaya employees or retired vested not yet collecting their pensions please send them this link below and ask them to join.

To register in the NRLN Avaya Retirees Chapter to receive emails from the Chapter and the NRLN, go to:

See news article below which contain some more correct and concise numbers than some previous news articles.

Respectfully Submitted.

Vern Larson, President, NRLN Avaya Chapter
Phone: 402-203-6899,


Avaya Reaches $300M Deal With PBGC Amid Bankruptcy
By Carmen Castron-Pagan, Bloomberg BNA – Aug 7 2017

Avaya Inc. and the Pension Benefit Guaranty Corporation reached a $300 million settlement involving one of the communication company’s pension plans ( Avaya, Inc. , Bankr. S.D.N.Y., No. 1:17-bk-10089, first amended joint chapter 11 reorganization plan filed 8/7/17 ).

Avaya will pay $300 million in cash and issue 7.5 percent of its reorganized holding company common stock to the PBGC, Avaya announced Aug. 7 in a filing with the Securities and Exchange Commission. The settlement provides for the termination of Avaya’s Salaried Pension Plan. The company’s Hourly Pension Plan will continue.

California-based Avaya is a multinational technology company that provides unified communications products and services, including telephone, internet, wireless data, and real-time video collaboration.

Bloomberg Law®, an integrated legal research and business intelligence solution, combines trusted news and analysis with cutting-edge technology to provide legal professionals tools to be proactive advisors.

The company filed for bankruptcy Jan. 19. At the time, the company listed $5.5 billion in assets and $6.4 billion in debts. Some of its largest creditors included Wistron Technology America, Avnet Inc., Hewlett Packard, Verint Americas Inc., and Inc.

The PBGC has a claim in unfunded liabilities of up to $1.24 billion with respect to Avaya’s Salaried Pension Plan, according to the filings. The settlement is part of Avaya’s reorganization plan with its debtors and needs to be confirmed by the U.S. Bankruptcy Court for the Southern District of New York.

Avaya’s Salaried Pension Plan had 7,978 participants, $1.5 billion in assets, and was 88.64 percent funded as of December 2015, according to company filings. The plan was frozen in 2003.

The company’s other qualified defined benefit pension plan had 6,912 participants, $777 million in assets, and was 88.73 percent funded as of December 2015, according to company filings.

The plans’ funding shortfalls are greater, according to the PBGC. The pension plan for salaried employees is 58 percent funded and has $1.1 billion in unfunded obligations, according to a PBGC statement. The pension plan for hourly employees is underfunded by $600 million, the agency said.

A number of participants in Avaya’s non-qualified pension plan, which is not insured by the PBGC, filed letters asking the court to protect their pension benefits. Some of the participants who filed the letters took issue with Avaya’s request seeking authorization to pay up to $3.7 million in executive bonuses while, they said, the company suspended their non-qualified pension payments.

Kirkland & Ellis LLP represents Avaya.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at

To contact the editor responsible for this story: Jo-el J. Meyer at

For More Information

Text of the Reorganization Plan is here.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reservd


To: NRLN Avaya Retirees Chapter Members
From: Vern Larson, President, NRLN Avaya Retirees Chapter
Subject: Avaya Reaches Deal with Creditors to Exit Bankruptcy – Aug. 8, 2017

Yesterday, Avaya announced that the Salaried Pension plan that was frozen in 2003 will be classified as in distress and will give the Pension Benefit Guaranty Corporation (PBGC) $300 million to take over the plan plus over 7% of the new Avaya company stock. They made a deal with the main First Lien Holders to ask the court to approve… In the plan the Hourly, Union Pension Plan and benefits will continue to be paid by the new Avaya Company. All details are listed on Prime Clerk as Docket 902, pages 11 & 12.

I have been working on posting additional information to all members. Here are some more details. Also, a link to a Reuters news article on the bankruptcy agreement is below.

Special, note the information “First-lien debt holders will receive about 95 percent of what they are owed, while holders of $1.44 billion in second-lien notes will receive about 1.6 percent, according to court papers. Unsecured creditors will receive around 8.2 percent of the $305 million they are owed.” Unsecured creditors will receive around 8.2 percent.

Avaya Plan Filed

Avaya filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan provides for the issuance of the New Secured Debt, with an aggregate principal amount of not less than $2,925 million (inclusive of any original issue discount) (the 'Syndication Amount') in form and substance materially consistent with the New Secured Debt Term Sheet and otherwise acceptable to the Reorganized Debtors and the Requisite First Lien Creditors, and subject to the New Secured Debt Term Sheet. Pursuant to the Plan, Holders of First Lien Debt Claims shall receive, as part of their distribution under the Plan, their Pro Rata share of:

  1. if the New Secured Debt is syndicated in an amount greater than or equal to the Syndication Amount, such Holder will receive its Pro Rata share of the First Lien Cash Distribution; or
  2. if the New Secured Debt is syndicated in an amount less than the Syndication Amount, such Holder will receive its Pro Rata share of the (a) un-syndicated portion of the New Secured Debt and (b) Cash in an amount equal to the proceeds from the syndication of the New Secured Debt less the New Secured Debt Cash Deductions….

The Plan includes a Management Equity Incentive Plan, which would permit the reservation or issuance of Reorganized HoldCo Common Stock, or other Interests in Reorganized HoldCo, on a fully diluted basis, to directors, officers, and employees of the Reorganized Debtors, with awards and terms and conditions thereunder determined by the Reorganized HoldCo Board, except as otherwise set forth in the Executive Employment Agreement. Any Entity voting on the Plan should be aware that the Management Equity Incentive Plan may dilute equity distributions under the Plan, including with respect to distributions of Reorganized HoldCo Common Stock."

Subject: PBGC - Q and A for NRLN Avaya Retirees Chapter

I have posted the link below of the just released Questions and Answers for Avaya Retirees Chapter Members from the PBGC, these are somewhat standard issue for all pension plan terminations. I would recommend for all to copy these and save so we can refer back to them as needed. These will help answer many of the questions everyone has.

I have been asked by the PBGC to extend an invitation to the Avaya Retirees Chapter members with other questions to send them to me and I will communicate directly with the PBGC for easy access for us to get timely answers.

My offer is to screen input for duplicity and answers but can also get answers for unique questions not addressed. Example, PBGC will not calculate anyone’s pension or make comments about one since they do this one-by-one after the termination, not before. I want to be careful to not get trapped into listening to long war stories we know can’t be resolved yet.

From our PBGC contact.

"We posted the Q&As just a few minutes ago, but as I always like to say, “nothing on the internet is written in stone!” click link below.
Questions and Answers for Participants in the Avaya Pension Plans

“We’d be happy to hear ideas for more questions from the NRLN Avaya Retirees group and we’d certainly value their input. In thinking about the initial set of Q&As, we expected workers and retirees to have questions specific to their own circumstances that we can’t yet answer. However, if we can provide more information about our part in the process or assuage other concerns we’re be happy to do so.

Please let them know they can send their suggestions for additional questions in."

Regards, Vern Larson, President, NRLN Avaya Retirees Chapter

Avaya reaches deal with creditors to exit bankruptcy
By Tom Hals; Reuters ~ Aug 07, 2017


S&P 500’s Biggest Pension Plans Face $382 Billion Funding Gap
By Brandon Kochkodin and Laurie Meisler, Bloomberg - Jul 20, 2017

Extreme Networks Completes Acquisition of the Networking Business from Avaya, Inc.
Avaya Press Release – Jul 17, 2017

Avaya, bankruptcy and the state of the changing communications market
By Justine Brown; CIO Dive ~ May 23, 2017

Avaya sells networking business to Extreme Networks for $100 million
By Natalie Gagliordi ; ZDNet ~ Mar 07, 2017

Avaya's Chapter 11 filing sends waves of disruption
By Guy William Clinch, NetworkWorld - Feb 10, 2017

Legally & Practically: What Avaya's Chapter 11 Means to Customers
By Marth Buyer, No Jitter - Feb 8, 2017

Avaya Partners Relieved by Chapter 11 Filing, Decision Not to Sell Call-Center Business
By Edward Gately; Channel Partners ~ Feb 01, 2017

Avaya granted $425m loan from US court
By James Pearce; Capacity Media ~ Jan 23, 2017

Avaya files for Chapter 11 bankruptcy, won't sell contact center assets
By Larry Dignan, zdnet - Jan 19, 2017

Telecom Company Avaya Files for Bankruptcy
Reuters report in Fortune – Jan 19, 2017

Multibillion-dollar phone firm deal may fall apart
By Josh Kosman, New York Post - Jan 4, 2017

NRLN Avaya Retirees Chapter Working to Protect What We’ve Earned

Another important release from August 25, 2016

The NRLN Avaya Retirees Chapter has been working database

June 16, 2017
The article below is only for information relevant to the NRLN’s agenda but not necessarily a reflection of the NRLN’s position on issues. Vern Larson, President – Avaya Chapter of the NRLN The NRLN is nonpartisan and its positions on retirement issues are presented in its Legislative Agenda and white papers that can be accessed from the Legislative Agenda tab at

Trump White House at work on executive order tackling drug prices

By Eric Sagonowsky; FiercePharma ~ Jun 14, 2017

If President Donald Trump can’t count on Congress to pass legislation targeting high drug prices, his administration may have to go it alone. The White House is working on an executive order on the issue, according to BioCentury, with eyes on value-based contracting for executive agencies.

The executive order would also seek trade policies that protect American drugmakers’ intellectual property rights abroad, according to BioCentury’s sources. The White House didn’t immediately respond to a request to confirm the details.

Since winning the U.S. election, President Trump hasn’t been shy about criticizing pharma, saying back in January that the industry has been “getting away with murder” with high drug prices. At the time, he said the government would implement competitive “bidding” to save billions in costs—not a popular proposal in the drug industry.

RELATED: Trump to pharma: You're 'getting away with murder,' and I'm the one to stop it

Some of the president's other ideas are favored by pharma, however, including a potential tax repatriation holiday, a tax overhaul, fewer regulations and trade policies that defend U.S. pharma’s IP rights.

The BioCentury report comes a day after the Senate’s Health, Education, Labor and Pensions committee convened a hearing to discuss drug pricing; two follow-up hearings are planned later this summer.

Also on Tuesday, Sen. Ron Wyden, D-Ore., introduced the SPIKE Act aimed at deterring the large drug price hikes that have made so many headlines over the last two years. Sen. Wyden’s bill would force drugmakers to justify price hikes above a certain threshold. It could require some companies to disclose R&D and marketing costs, another unpopular idea in biopharma.

RELATED: New FDA commissioner Gottlieb unveils price-fighting strategies

The bill targets not only sky-high price hikes like Turing Pharma’s notorious 5,000% increase on Daraprim but also smaller hikes on big-selling drugs that can hit Medicare and Medicaid budgets hard. It would allow drugmakers to roll back their price hikes if they don’t want to release information justifying the underlying costs.

And while the FDA can’t regulate drug prices, President Trump’s new agency chief recently unveiled some of his own tactics aimed at lowering costs.

RELATED: Pharma CEOs, eager for tax breaks and regulatory help, make nice with Trump

Last month, FDA Commissioner Scott Gottlieb said the agency will publish and update a list of medications that are off patent and have no competition; work to improve generic review times; and seek to “curtail gaming” of regulations by the industry that allows companies to extend patent monopolies.

On the first strategy, Gottlieb said such a list could “entice competitors into the market” and ultimately lower costs.

A number of proposals, including Medicare price negotiations and drug importation, are pending in Congress, but none has been taken to a vote this session. Meanwhile, lawmakers in more than 30 states are trying to pass their own bills to rein in pharmaceutical costs.

Avaya Retirees Chapter Contribution Form

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