Okay?
Evidence of meeting #38 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was nortel.
A recording is available from Parliament.
Evidence of meeting #38 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was nortel.
A recording is available from Parliament.
10:05 a.m.
Conservative
The Chair Conservative James Rajotte
Okay, we'll accept that amendment.
(Motion as amended agreed to) [See Minutes of Proceedings]
Thank you, colleagues.
We have with us today, for the second hour, the Nortel Retirees' and Former Employees' Protection Committee, with Mr. Donald Sproule, national committee chair, and Ken Lyons, representative. We also have the Canadian Nortel Employees on Long Term Disability, with Mr. Lawrence Clooney, leader. And we have three individuals: Diane Urquhart, independent analyst; Paul Hanrieder, professional engineer; and David Jeanes, Nortel pensioner.
We'll go in that order, and please limit your comments to five minutes so we can have time for members to ask questions.
Mr. Sproule, we'll start with you, please.
10:05 a.m.
Donald Sproule National Committee Chair, Nortel Retirees' and Former Employees' Protection Committee
I thank all members of the committee for this opportunity to speak on behalf of retirees and former employees of Nortel.
The committee I represent includes Nortel retirees and former employees and was formed after Nortel filed for bankruptcy protection on January 14. We represent some 17,500 pensioners across Canada, the bulk of them in Ontario, but 3,000 in Quebec and 2,000 in other provinces. Of that, there are another 11,000 people who are represented in the health plan. There are 750 pensioners who receive additional benefits, and over 1,000 severed employees who are affected by what's happening at Nortel. Today, in other discussions, I've discovered another 450 employees on long-term disability who are being affected by what's happening with Nortel.
Why are we here today? We wish we weren't here. We wish there were a viable solution for Nortel to emerge from CCAA, but there's no indication that such a plan is forthcoming. In fact, the press is full of indications that the pieces will be sold off and what will be left will be a rump of the corporation.
There is a campaign to save Nortel that's under way from former executives, and I wish them well, and I hope they get enough oxygen to breathe. But the reason I am here is I must plan for the worst outcome. That worst outcome will be the windup of Nortel.
Who is affected? It's the registered pension plan. It's underfunded. Yes, the pension assets are segregated from the corporation, but there's a significant piece of underfunding in the plan itself, to the tune of about $1 billion. That represents two plans, both the negotiated plan and the non-negotiated plan. There are union retirees who are also affected. That plan, as Mr. Zafirovski has said, has dropped 31% since the last evaluation. Under CCAA and BIA, our pension deficit will sink to unsecured creditor status.
The retiree health plan and other benefit plans are underfunded. That whole area is extremely opaque. Pension plans are at least public, and there's information available. So unlike the registered plans, it's not funded, it's paid out of Nortel revenues, there is zero visibility in terms of the long-term viability of these plans, and there's no federal or provincial government oversight. These claims will actually sink to unsecured creditor status. And in the case of putting pensions and the health plan together and the loss of that for some of our members, it would be welfare for some of those people.
In preparing for this, I started looking at the long-term disability group. Again, there are no federal or provincial standards for long-term disability. The plan is administered through Nortel's health and welfare trust, and is funded, again, through Nortel general revenues on a quarterly basis. It is a self-insured plan. There is no backing of any insurance companies. If Nortel goes insolvent, the monthly payments to those long-term disability people will sink to unsecured creditor status. If they ever make it to the pension plan, they'll lose any accruement of those dollars in terms of making it into a pension plan. For them, they'll lose crucial health care. Again, it means welfare for some, for people who are ill-equipped to look after themselves.
Finally, there are the severance people. Employment standards acts, from what I understand, are a lot in the provincial domain, but those standards are being overridden by CCAA and BIA. Those severance claims will sink to unsecured creditor status. As we all know, the severed employees now have to move on to EI and get handouts from the taxpayer.
Who are the unsecured creditors? Let's look at number one: the bondholders, a sophisticated bunch of money managers—sophisticated not only on the bondholder side but in the corporation. They negotiate between equals. They do it for a living. The bondholders take an active view of risk management, of what happens if the corporation goes bankrupt. They look at the probability of default. They shorten the maturity dates on bonds, they ask for higher yield, and they're clever enough to make sure they get cross-guarantees between the two jurisdictions of Nortel, between the U.S. and Canada. In this environment, the original bondholders are actually selling or probably have sold off a lot of their assets, and they've been picked up by vulture bondholders. The information I have is that those bonds are probably going at 12¢ on the dollar.
I don't know what the outcome is going to be if Nortel goes insolvent, but as an unsecured creditor, I'm going to get something north of 12¢ on the dollar. Let's call it 20¢ on the dollar. But I and all of the people I've talked about are going to take a significant haircut.
I'm worried about other jurisdictions. This is a very complex case. Nortel is a large organization. From what I understand in Nortel Canada, there are very few assets. There is little cash, and a global R and D centre with huge costs associated with it. So there are many liabilities.
One of the most significant of the liabilities is what's represented by the group I represent—$1 billion at least from a pension underfunding, plus another maybe $300 million if you add up all the other issues. Outside Canada there's cash, but it's cash that probably can't be reached, because it's tied up in China, which has policies that don't allow you to bring cash back to Canada.
My concern as a creditor is to make sure that the rightful assets belonging to the parent corporation come back to Canada. I am also concerned about other jurisdictions trying to reach out and grab assets in Canada, where there are limited Canadian assets.
Let me move on to the retirees. We are not a sophisticated bunch of money managers. There is an inequality between what the company understands of the pension plan and what the retirees understand. We've put in a lifetime of work and invested in our pensions and our benefits. For us, risk management was all about whether we were going to live too long or too short, whether our spouses would be looked after, whether we'd have a good health plan if our health declined. We never contemplated company bankruptcy.
For the disabled employees, their wage replacement and health care claims are going to sink to unsecured status. Any pension accrument will sink to unsecured status. These people are not eligible for EI or WEPP—all they're going to get is their CPP disability. For the severed employees, there will be no severance pay. Most employees did not even contemplate that they weren't going to get severance. It's highly unusual for people not to be paid severance as they leave the corporation. These people have been forced onto EI, forced to go on at the taxpayers' expense.
What we have here is an egregious imbalance. This problem has been known for a while, and it's not been fixed. People such as pensioners and the disabled and former employees sink to the bottom of the ladder. In today's economic climate, things are going to be brought forward. It's not just about the assets, or even the tax implications. The bondholder is going to get tax write-offs, tax gains. I don't know what we're going to get. We're going to lose money, but I doubt if we're going to be given any treatment from a taxation point of view.
I'm here today to ask you, the members of Parliament, to remedy this situation. The CCAA and BIA sinks us down to unsecured creditor status. I urge you, with the utmost urgency, to grant higher-priority ranking to pensioners, disabled employees, and severed employees. I ask you to handle their claims.
This is a federal jurisdiction. Pensions are provincial issues, but this is a federal jurisdiction. Two days ago there was a unanimous vote in the House, and one of the items in that unanimous vote was to give pensions higher priority in bankruptcies. That unanimous agreement has now been shifted to a study by some other committee. I think what's interesting about the proposal here today is that it requires no new government spending. So there's an opportunity here.
Government, you're investing in infrastructure today to protect the economy. Could you please invest in the legal framework to correct this egregious imbalance? This legislation is shovel-ready, and I implore you to act quickly.
Thank you.
10:15 a.m.
Lawrence Clooney Leader, Canadian Nortel Employees on Long Term Disability
I'd like to pass my right to speak to Sue Kennedy, who is actually the chair of the group.
10:15 a.m.
Sue Kennedy Spokesperson, Canadian Nortel Employees on Long Term Disability
Thank you very much.
We appreciate the chance to speak to everyone here. In a way we've been hiding in the back because our benefits were still being paid up until now, and we appreciate that. You don't know how much we appreciate it.
As people on LTD, we have no options. We basically ended our working careers when we qualified for LTD. Now that things are getting to this stage, probably only a small percentage of the people on LTD recognize that their benefits might be at risk. We know very well how much they are at risk from doing a lot of research on the subject.
We wonder why Nortel could get tax benefits by storing the money to provide our benefits in a health and welfare trust but did not insure this LTD benefit, as specifically recommended by the Canada Revenue Agency's bulletin on the subject. We also wonder why our government has no way of enforcing that requirement and tells us that we need to come to the finance committee to ask them why it was not protected and what the finance committee can do about it.
Right now, we're still being paid. We appreciate that. We also appreciate that it could end at any time, and we have a lot of years before we can get to our pensions, if there are enough pensions left, thanks to all the efforts of the pensioner group. During the time we're waiting, which could be up to 24 years for some of the people that we know in our group, we will no longer get our wage replacement. It was 70% of our original salary for most people. That salary could be from a long way back; in my case, it is in 1994 dollars, so that was a pretty small salary to start with. From that, if we get 20¢ on the dollar, I'll be making about 20% of the salary that I was getting from the LTD pay.
We will lose our health benefits. Many of us, in addition to making great use of the health benefits provided by Nortel, also have significant out-of-pocket health costs, so this is another factor that really worries us. We can't qualify for EI because we weren't paying into it, nor can we qualify for the wage earner protection program.
We will be left with the CPP disability. That will be about 20% of what we were making on our LTD. CPP disability was designed to provide 25% of the basic minimum that people need to live on.
As Nortel employees we deserve better than that. Instead, some people on LTD will end up possibly on welfare. We will end up dependent on the government--not in a proactive way, in that they protected our benefits, but retroactively, by applying for welfare. Some people in our group will end up in the Royal Ottawa Hospital, and one already has--that's really hard for us to see--because of all the stress this is causing us.
Thank you.
10:20 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation.
We'll now go to Ms. Urquhart. Ms. Urquhart, please go ahead with your presentation.
10:20 a.m.
Diane Urquhart Independent Analyst, As an Individual
I'm an independent financial analyst.
Nortel was operating at a cost structure above what its revenues could support, and it's burning cash at the rate of $1 billion annually. All the figures I'm giving today are in U.S. dollars.
The financial crisis is causing a large drop in telecommunications equipment sales throughout the world, and Nortel, due to the uncertainty of whether it's liquidating or not, is having its revenues decline at a much greater rate than its peers in the industry.
I'd like to emphasize that Nortel chose to enter bankruptcy protection in January 2009 by missing a $107 million interest payment, despite the company having $2.5 billion of cash on its balance sheet. Nortel's next major principal repayment is not until 2011, when $1 billion of debt will need to be repaid. That, of course, is two years from now. We're dealing with much more stressful situations in other bankruptcies that already have debt repayments that cannot be refinanced.
Nortel management has indicated it has volunteered to enter bankruptcy protection to avoid paying severance. We don't have detailed estimates from the company, but on the assumption of the 5,000 jobs cut around the world, the estimated bill for severance would be approximately $500 million, of which we would anticipate Canada to be approximately $100 million, in U.S. dollars.
Under the current CCAA and BIA laws, it is correct that severance does not have preferred priority over unsecured creditors. I would like to note, however, that it is prevalently the case that numerous companies that have filed for CCA protection enter in the beginning days of the process to seek approval from the judge for the payment of severance. In this case, they have chosen not to do that and they have said the purpose of the filing was not to pay severance in order, as we heard many times today, to optimize the value of Nortel--“we need to pay bonuses to the current employees to preserve the value of Nortel”. Obviously, severance and making special contributions in order to top up the pension fund deficit is, in his mind--Mr. Zafirovski, for respect--depleting value for the estate. From my perspective, those statements of optimizing value have a lot to do with maximizing the value for the bondholders by not paying the severance and the pension fund deficits around the world.
Indeed, Nortel is definitely technically bankrupt. The value of the assets on the pending sales, as in the early stages of ongoing concern, are considerably less than the estimated $11 billion of claims. I've estimated, based on what we can find from the updated actuarial reports, that the employment-related claims in the world are approximately $5 billion. So half the creditor claims that are currently being sought for compromise are in the employment-related field: severance, disability, pension fund deficits, not only in Canada but in the rest of the world.
After listening to the presentation of management earlier today, it's very clear to me that they are no longer vigorously pursuing Nortel as an ongoing concern. All the phrases are “I tried to rectify the company”, “I really believed in the turnaround”. These are all in the past tense.
This group, both the terminated employees and the retirees, would like to have an ongoing concern to better enable the payment of the pension fund deficits. And more importantly, they would like to have an ongoing concern to provide research and development jobs in our country for the children of the retirees, the engineering graduates, the mathematics graduates, the physics graduates, and so on, so they could have gainful employment in their pursuit of innovation within Canada and not have to go to the research and development centres of the foreign buyers of the Nortel businesses.
I'd like to note that it is erroneous for the government to say it is reluctant to intervene in the provincial jurisdictions for severance and pension benefits standards. The federal government administers the Companies' Creditors Arrangement Act and the Bankruptcy and Insolvency Act. I don't have time today to go into all the details of this, but I urge everyone to examine the Court of Appeal of Ontario case by Justice Farley. When the Superintendent of Financial Services of Ontario asked his court to approve the special contributions in order to replace the deficit of the Ivaco pension plan, he turned down the request--even though that would have been in the normal course of provincial legislation--on the premise that Ivaco would be liquidating, and under the BIA the pension deficits and the special contributions were pari passu with the unsecured claims. He was unwilling to execute the protections that were in the Ontario Pension Benefits Act.
For this reason, and as a result of what we have heard today about the premise for not paying the employment-related claims in the Nortel case, we ask for an emergency amendment of the Bankruptcy and Insolvency Act to give super-priority to the severance and pension deficits over the bondholders and the unsecured suppliers in this situation.
A statement was made that there were no secured creditors in this company. I'd like to note that $200 million of debtor-in-possession financing—non-arm's-length financing--has come up from the United States. It has been granted super-priority status with respect to the cash disbursements that will come from the sale of assets by Nortel. It is a Canadian-based company, although there are multiple subsidiaries in multiple areas of the world that have their own legal corporations and their own specific indentures and considerations.
A point was made Don Sproule, the head of the retirees protection committee, that Canada is in a particularly precarious situation. Even though Nortel has a 115-year history and is the Canadian base of operations for half of the research and development of Nortel in the world, it is primarily a cost centre. This is typical of a number of successful international companies.
Due to the inter-corporate transactions between Canada and the U.S. on internal transfer pricing agreements, inter-corporate loans, and so on, it is our firm belief that unless there is government intervention there will be limited cash from the disbursements of the sales of Nortel available for provision of top-ups to the pension plan and severance--so much so that we could have nothing in Canada, or perhaps ten cents on the dollar.
I think it is very optimistic at this point, based on the inter-corporate transactions without intervention by the CEO of the company, to disband with internal contracts to ensure that the appropriate amount of money is dedicated for the payment of the pension deficit.
10:25 a.m.
Conservative
10:25 a.m.
Independent Analyst, As an Individual
Basically we're asking for the BIA amendment. We're asking that Mr. Clement be required to set conditions on the pending sale of businesses by the Canadian-based international company so that a substantial portion of the proceeds does not go to the debt-holders of Nortel, but goes to the pension fund and to pay the severed workers.
10:25 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
We'll go to Mr. Hanrieder, please, for your opening statement.
June 18th, 2009 / 10:25 a.m.
Paul Hanrieder Professional Engineer, As an Individual
Good morning. My name is Paul Hanrieder. I'm a terminated employee of Nortel with almost 15 years with the company. I would like to thank the members of this committee, especially Mr. Mulcair, for the opportunity to come here today to speak to you on issues related to Nortel's bankruptcy protection and filing, the impacts on terminated employees, and ancillary effects to Canadian taxpayers that have resulted.
Since the bankruptcy announcement on January 14 of this year, there have been significant impacts to employees who have worked extremely hard and given their hearts and souls to this company for a great many years. I speak to you today in representation of well over 440 terminated employees who have been laid off, and another 600 more potentially expected to be terminated this year.
You can only imagine the sheer terror that many of us awoke to on that fateful day. Dreams of moving on and building new lives, finding new jobs, building new businesses, and all manner of other hopes and dreams all vanished in seconds. The vast majority of employees had decades of history with Nortel and were promised industry-standard severances that would have permitted them to transition smoothly into new roles and opportunities.
10:30 a.m.
Conservative
The Chair Conservative James Rajotte
Mr. Hanrieder, I've been told that you're speaking too fast for translation, so please slow down.
10:30 a.m.
Professional Engineer, As an Individual
Sorry. I'll slow down.
All of these contracts were conveniently rendered null and void when Nortel filed for creditor protection under the federal CCAA legislation. To our even further surprise, we were now to be ranked equal to unsecured creditors and could only hope to expect pennies on the dollar in the settlement that could easily be more than a year away. We also discovered that severance and pension issues are only protected under provincial jurisdiction. But under federal CCAA protection, all provincial requirements are no longer honoured.
At the time the company filed for creditor protection, it was sitting with over $2.5 billion of cash on its books. It boggled all our minds to understand how creditor protection filing was needed with that much cash available. We were, only weeks before, assured by the CEO that we had liquidity well into Q4 of 2009.
This is what we need to fix. CCAA and BIA legislation needs to be revised to give super-priority to current and former employees' claims in these circumstances. Employees and pensioners have no recourse with a bankrupt company and therefore cannot be treated as a commercial creditor. Employees and pensioners need to be acknowledged as a unique group. Please ensure CCAA cannot be used, as it has in this case, to circumvent provincial employment standard laws and to hide from employee financial obligations for severance and pension top-up requirements. Please reference the Mike Zafirovski e-mail I've provided in my brief from 1/30/09. It clearly states it was key to Nortel's liquidity going forward that severance obligations be waived through the creditor protection process.
Unfortunately, despite the clear focus on liquidity and finding a way through its debt minefield, the company is now paying $45 million in executive bonuses and paying employee incentive bonuses of an estimated $68 million internally. This does not sound to us like a company that is trying to find a way out of financial straits.
This path is an all-too-easy way for employers to unload employee obligations onto the Canadian government and its taxpayers. This path pushed an expected 1,100 employees onto unemployment insurance at an estimated cost to us as taxpayers of $20 million—a loss of $34 million in income taxes we would have paid on the severance.
All told, by skilful execution of this legal plan, Nortel avoids paying an estimated $125 million in severance obligations in Canada, $1.25 billion in pension obligations, $200 million in post-retirement health and other benefits. They also got to take out of the pockets of all Canadians about $54 million without a single shot being fired. Wow, this is a pretty sweet deal for them.
This was all accomplished using the loopholes that exist in this aging CCAA and BIA legislation and with the help of $5.5 million per month of lawyers. This needs to be fixed, and fixed now, as it has been and will be used by many more companies that will go into bankruptcy in the future.
We, as the severed employees of Nortel, want to ensure this indignity is not propagated onto any other hardworking Canadian employee in the future. We want to ensure the laws are amended and ensure that employers such as Nortel are forced to honour their employee obligations and do the moral and ethical thing for the employees. Nortel and its executives need to be made accountable to this case, and before any bonuses are paid out, they need to be made to honour their severance and pension commitments.
Please refer to the additional briefs we have provided on this matter, as I could not cover all the issues in this short presentation. We are more than happy to work with any levels of government to rectify this situation for future generations.
In closing, I would like to thank everyone for their time and attention here. Once again, I ask our government to begin immediate work on fixing the federal CCAA and BIA laws to protect the innocent Canadian workers going forward.
I will close now and make myself available to answer any questions you may have.
Thank you.
10:30 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you for your presentation.
We'll go finally to Mr. Jeanes, please.
10:30 a.m.
David Jeanes Nortel Pensioner, As an Individual
Yes, thank you very much, Chair. I'll speak very briefly as an individual and as a pensioner.
I joined Bell Northern Research, which subsequently became part of Nortel, back in 1973, and I went on pension 29 years later. I want to say that one of the problems you're facing is that among the 20,000 or so people who are already affected or who are going to be affected by the underfunding of the pension plan, many older people are completely unaware of the risk they are at.
I've been spoken to by many people who are on survivor pensions and who have continued to assume that their pensions were protected by government. These issues of the underfunding of the pension plan, the impact of the failure of the stock market, and the impending cancellation of many of these supplementary benefits, such as the health plan, life insurance.... The health plan, of course, includes dental benefits, includes the drug plan and so on, which is absolutely crucial for these older retirees. Many of them are going to be in a case of extreme hardship.
In this room today I recognize many former colleagues and contacts from Nortel. I think you've heard repeatedly and through many other contacts that Nortel was very much a teamwork kind of company that made a huge contribution to Canada's technology economy. It functioned like a university. It was perhaps more important than the National Research Council in terms of creating knowledge and intellectual property that allowed the formation of many companies and many world-leading technologies. It was a jewel that is at risk of loss. Therefore, I, like many other former Nortel employees, hope that initiatives may be possible like the Robert Ferchat proposal that part of the company might be resurrected to create a much smaller but still a technology jewel as part of Canada's technology economy.
I will say that you have many people who could not come into this room today. There were people who were turned away and are standing on the front steps outside Parliament this morning. Back in January, when Nortel first filed for CCAA protection, we had over 700 people show up trying to get into the first information meeting organized entirely by volunteers, because many of us, as pensioners, as retirees, have just not had the kind of information from the company or from the monitor to really make it clear what's happening in this process. So we're here before you today, and you've heard some eloquent proposals from the Nortel retiree protection committee. I have volunteered also to help that committee. I just wanted to speak today as a pensioner, like many of the people sitting behind me for whom this is a crucial issue.
Federal government intervention is essential, because although this is a multi-jurisdictional problem, as you've heard, many of the problems have been created because the federal process overrides provincial protections we were relying on.
Thank you.
10:35 a.m.
Conservative
The Chair Conservative James Rajotte
Thank you very much for your presentation.
We'll go to questions from members immediately. We'll go to Mr. Pacetti to begin.
10:35 a.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you, Mr. Chairman.
Thank you to the witnesses for appearing. It's been very interesting. I knew we'd get another version of the facts.
It's difficult. Everybody in this room is here for the right reason, and I think we all sympathize with the former employees. It's funny how we got here. We're here actually for another reason. We're conducting a study on the stability of our financial system and credit availability, and then we noticed there were problems with pensions, so we've been conducting a study. As It turns out, there's no better case study than the present case study, because it's actually a live one.
Now we're caught in a dilemma, because as parliamentarians we have committees and we have our own responsibilities within those committees--forget about our jurisdictional responsibilities, whether it be federal politicians, provincial, or municipal politicians. You're lucky I can toss the ball over, because we have the parliamentary secretary for industry, but I'm not sure how we're going to be able to solve this.
There are two points here. There's the same question I asked Mr. Zafirovski initially; that is, how do we prevent this from happening again, and what do we do now? What is happening now I'd hate to say is a commercial dispute, but there is definitely disagreement on the facts. How do we get to an agreement if we can't even agree on what happened in the past? So this is a big problem.
Everybody pretty well has suggested that we need to change the CCAA. I don't know how that's going to happen in the next little while and help the people we're trying to help. So I need some direction. I have to understand a little bit of what's happened in the past.
For example, Mr. Sproule, you talk about the bondholders being sophisticated, but I beg to differ. The bondholders are not sophisticated or else they wouldn't have invested. I think they're the least sophisticated of all, and that's what we've been able to see during all our studies. I'm going to turn around and maybe put the blame on you, because you were actually there. You're the employees; you see what's going on. Why didn't you help us and say maybe this is not a company we should be investing in? It might be a hard question, and you might laugh at it, but you are the front people. What happened there?
10:40 a.m.
National Committee Chair, Nortel Retirees' and Former Employees' Protection Committee
Could I respond to the sophistication aspect? If the bondholders are not sophisticated, then I'd hate to say what I am. I don't have the assets or the resources to investigate; they, when they investigate, look to see if the company is going to go bankrupt. I don't, as an individual or a pensioner.
10:40 a.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
The bondholders who now have the bonds are probably sophisticated because they're speculating now. I'm talking about the original bondholders, who actually did lose money. Those bondholders are actually in this room, because those are their pensions, right? That's who invested in those bonds.
10:40 a.m.
National Committee Chair, Nortel Retirees' and Former Employees' Protection Committee
Indirectly.
The question is, where did the company go wrong? It's been six years since I left, and I don't know. Certainly the legal issues from an accounting point of view did not help the company. Then we had a period when I think senior management was probably creating an air of competence, stability, and integrity, but not leading the company forward. I think that maybe by the time Mr. Zafirovski came around, he was working on the right things, but he had some real challenges in front of him.
What I think really precipitated some of this is the collapse of the marketplace. The water went down, and those ships that were having troubles were exposed. That tsunami of what's happened in the marketplace has certainly hurt the company. If I understand correctly, from a pension point of view there were some obligations in the U.K. that actually helped drive the company into chapter 11. That was the triggering event to go into CCAA.
10:40 a.m.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
That's part of the struggle that we have.
I know you're speaking as a former employee, but do the employees presently structure themselves right now? I don't want to use the word “unionized”, but are they structured? Do they get together to decide on the benefits they do have access to? Are you not organized in that fashion?
10:40 a.m.
National Committee Chair, Nortel Retirees' and Former Employees' Protection Committee
Not at all.
