Monsanto retirees who were shifted to Solutia for retiree benefits
after the spin-off from Monsanto Company have their benefits at risk due to
Solutia’s filing for bankruptcy in December, 2003. The filing for bankruptcy was communicated to those affected
retirees and beneficiaries by a letter from John Hunter which stated that the
filing had no immediate impact on the benefits. But, the letter further stated that Solutia planned to ask the
Bankruptcy Court to relieve Solutia from any obligation to pay these benefits.
The retiree benefits at risk are specifically medical
benefits, life insurance and disability benefits. Pensions are not included in any bankruptcy considerations at
this time.
The Bankruptcy Code requires the debtor, Solutia, to
negotiate any proposed change in retiree benefits with a committee of retirees
if such a change is necessary to permit reorganization of the debtor and assure
that all creditors, the debtor and all affected parties are treated fairly and
equitably. Solutia has made known the
change it proposes. It is in the
process of asking the Court to determine that it can terminate those benefits
mentioned above for those retirees (and beneficiaries) of the original Monsanto
Company who had been shifted to Solutia.
You may see these referred to as the “pre-spin” retirees; other retirees
are referred to as “post-spin” retirees, whose benefits also may be at risk.
Several pre-spin retirees contacted law firms regarding the
situation and, as a result, a proposed retiree committee has been formed with
the following members:
Ken Kettler
-- Chesterfield, MO (Chairman)
Jack Treece
-- Molino, FL
Larry Baird
-- Gulf Breeze, FL
Don Meade
-- Alvin, TX
Phil Hamer
-- Wilbraham, MA
Don
Margenau -- Chesterfield, MO
Ed
McCormick -- Collinsville, IL
It is the intent of this proposed committee to resist any
change and work to protect the existing benefits to the greatest extent
possible. To this end, the proposed
committee has engaged two law firms who expressed an interest as a result of
retiree inquiries, Spencer, Fane, Britt and Browne of St. Louis, MO and
Haskell, Slaughter, Young and Rediker of Birmingham, AL. Spencer, Fane got involved because two
members of the firm have a parent or parents who are pre-spin retirees;
Haskell, Slaughter was contacted by interested pre-spin retirees.
Application has been made to the Court for:
-
Recognition of the committee
- Approval of the two law firms as
legal counsel for the committee
- Payment of the fees and expenses
incurred with payment to come from post-petition financing of the bankruptcy.
Written approval has not been received from the Court as of
this writing.
In a related filing Solutia has asked the Court for a
declaratory judgment that Pharmacia, as the successor to the original Monsanto
Company, is responsible for providing the benefits (medical, life insurance and
disability). The committee is
determining what position to take regarding this filing.
It should be noted that Solutia can make no change in these
benefits unless and until a court order permits it.
Additional information will be communicated as it becomes
available.