NRLN Avaya Retirees Chapter Updates - Dec. 5, 2017

I have been receiving numerous questions from members regarding the Court’s recent expected approval of The 2nd Amended Plan of Reorganization. What happens to us now? Well, it depends.

Key items:

The Avaya pension center will be paying the Jan 1st paychecks. Avaya is currently awaiting for the Pension Benefit Guaranty Corporation (PBGC) to set up a transition team. I have been told it sometimes takes several months for final transition over to the PBGC’s pay agent… patience is needed.

There are around 70 pensioners that will be over the PBGC maximum payouts, they will be receiving a communication informing them that their payment is being cut back to the PBGC maximums.

If a pay date is on a banking holiday, like this coming January 1st 2018, it is paid the next day. Paper checks are mailed prior to the pay date.

Supplemental Pension payouts. Show me the money!

The supplemental payout is paid on a pro rata basis, (that is proportional, in Bankruptcy the money in that pool is divided proportionately among all of the creditors in the pool. To clarify, I have not heard any official time frame as yet on when the payments will be made.

I do know they (the attorneys) have a lot a work to do before they can start paying. They will continue working on the claims, approving, disallowing and even expunging where needed. One issue is there are many supplemental claims where the person checked the box on the Proof of Claim form that stated their claim was a Priority claim. These claims were originally placed in an administrative priority bucket that could be paid out all the way up to 100%.

All of those claims needed to be culled out and reclassified as all of the unsecured supplemental claims and be paid the “Plan’s” pro rata rate, whatever that final number ultimately ends up as. We know it will be in the pennies to the dollar range. The money required for payments to secured claims will have more money now that they reclassified them. It may have some small effect on the pool of money that the priority claims were to be paid out of, more money for the secured claims maybe.

Not so in the unsecured Creditor bucket of money where our Supplemental Pension claims were designated and classified to be no priority status for any Supplemental Pension Claims, they are unsecured claims.

I was told they probably will pay in installments over a period of time, which could relieve some anxiety some have had regarding tax consequences.

I was told it may take a year to pay. Some of the smaller claims could get lump sum payments. So, nothing official has been released.

It will take some time in my opinion, so probably nothing will be paid this year. Again, we all need to be patient and it will all be worked out.

The PBGC, the governmental agency, played a huge role in what happened or happens to us (retirees). The PBGC determines how both of the Salaried Pension Plan and the Represented (Union) Pension Plans were affected.

First off, the PBGC by Bankruptcy Law was our representative on the Creditors Committee. The PBGC was there because they are one of the largest secured creditors and automatically receive a seat on the Creditors Committee along with the other major secured debt holders, creditors.

Retirees are not allowed on this committee in most bankruptcies. The reason given by the courts is that the PBGC represents us. However, in many other bankruptcies cases and in ours unions are allowed to have a seat on the creditor’s committees if they petition the court for a seat. This is because they have members still employed and labor agreement contracts in force. That is a good thing. However, corporations and courts think legacy liabilities (salaried retirees) are not.

(See our latest version of the NRLN Bankruptcy White Paper that advocates Congress pass legislation needed for fairer treatment of retirees in corporate bankruptcies. Click here: )

The PBGC and the Union Represented Creditor Committee members fought for us with the other major creditors (owners) and it was worked out that the only way Avaya could emerge from bankruptcy and be an ongoing company post-bankruptcy was a major compromise that led to the termination of the Salaried Pension Plan and the ultimate take over by the PBGC and the retaining of the Represented (Union) Pension Plan and all benefits by NewCo Avaya.

See interesting excerpts below from the attached PDF of the court document filed in court by Sharon L. Levine and Dipesh Patel, Attorneys for the Communications Workers of America. Sharon Levine was the first attorney who was referred to me in November 2016, (described to me as a “pit bull” in bankruptcies). She spent many hours providing guidance, counseling and schooling to me and a few other leaders in our Avaya Retirees Chapter months before Avaya had filed for bankruptcy early this year. She was an enormous legal help to us. Everyone in the Represented Plans (CWA and IBEW) should read the attached court document and be very thankful for her and the role her team played in the outcome.

From the attached CWA document:

4. The CWA is a labor organization whose members include both employees, current and former, and retirees of the Debtors. Not only does the CWA represent certain of the Debtors’ employees and retirees, the CWA also represents non-filed by spouses and other beneficiaries entitled to benefits under the current collective bargaining agreement with the Debtors.

5. In total, the CWA represents the interests of about 463 active workers, about 3,757 retirees who receive a pension from the Avaya Inc. Pension Plan, which remains in place under the Plan, and over 15,000 retirees, surviving spouses and dependents whose health benefits continue following confirmation of the Plan – a tremendous result following a chapter 11 process.

Statement in Support

9. The CWA supports confirmation of the Plan.

10. The Plan, if confirmed, allows the Debtors to move forward to implement their restructuring efforts. As noted above, the Plan, which has the support of the Debtors’ major financial stakeholders, (1) deleverages the Debtors’ balance sheet, (2) reorganizes and keeps intact the CWA collective bargaining agreement and provides for the continuation of the Avaya Inc. Pension Plan to the benefit of over 15,000 retirees, and (3) provides a recovery to the Debtors’ creditors. Doc 1541 Filed 11/22/17 Entered 11/22/17 16:01:36

Remember, all those have HRA OneExchange accounts, the monies have been deposited to your accounts for 2018. The bad news is you only have until tomorrow (December 7) to make any changes to your Health or Drug plans if you want to make a change.

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

Link to other NRLN White Papers at:,

  • Pension Guarantees that Work for Retirees, A Proposal for Commonsense PBGC Reforms
  • Pension Asset Protection (PAP) – Back Door Reversions
  • Protecting Retiree Benefits - Pension Benefit Guaranty Corporation Rules Reform
  • Protecting Retirees in Mergers, Acquisitions & Spin-offs
  • Protecting Retiree Benefits in Bankruptcy


Avaya to pay PBGC $340 million as part of restructuring agreement
By Hazel Bradford; Pensions & Investments ~ Nov 29, 2017

U.S. judge clears Avaya Inc to exit bankruptcy
By Jim Christie; Reuters ~ Nov 28, 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.

National Retiree Legislation Network – Avaya Retirees Chapter Contribution Form The NRLN is a nonprofit, tax-exempt organization. Contributions are not tax deductible.


Age __under 55; __ 55-64; __ 65 or over


City_____________State___Zip_____Zip+4 ____


Email Address (if available)____________________________

I get my retirement benefits from______________________________(name of company)

Mail with your check or money order (no cash) for $25, $50, $75 or more (any amount will be appreciated) payable to NRLN, Inc., PO Box 69051, Baltimore, MD 21264-9051

  Suggestions and comments about this website should be addressed to
  Copyright 2012 December 7, 2017