Nortel Networks Corporation – 39
August 3, 2012
Updated Hardship Fund Eligibility Criteria
On July 27, 2012 the Court approved the expansion of the scope of the Hardship Fund to include Nortel pensioners and survivors, allowing them to apply for a payment from the Fund for circumstances which satisfy the requirements. Payments from the Hardship Fund are treated as an advance on future distributions, so any amount awarded will be deducted from the recipient’s ultimate Compensation Claims recovery from the Nortel estate.
The Hardship Fund has been in place since July 30, 2009. It was originally established in response to urgent financial need experienced by former Nortel employees who had no income because they lost their job with Nortel. Small lump sum payments of up to 8 weeks’ salary (based on a maximum weekly salary of up to $1,200 per week) were made to individuals who qualified under the terms of the Fund as an “advance” on any future distribution to be made on their claims against the Nortel estate. The Hardship Fund committee also had discretion to approve payments in cases of medical or other emergencies in an amount of up to $2,500.
Nortel pensioners and survivors were ineligible under the original version of the Hardship Fund Eligibility Criteria. Since the pension cutbacks last summer, however, the Court-appointed Representatives became aware of situations of serious financial hardship among pensioners and sought the expansion that was approved by the Court on July 27.
If you are a Nortel pensioner or survivor and you are in a position of immediate financial hardship, you may request a payment from the Fund by completing a Hardship Payment Application. Koskie Minsky can help you complete this form. This will be a private and confidential process, and you will not be required to share your personal information with anyone other than the Monitor, who is responsible for assessing your application, and your Representative Counsel.
Eligibility: In order to be eligible for a Hardship Payment, there are certain criteria you must satisfy, including:
- You must be a member of one of Nortel’s defined benefit pension plans
- You must have had your pension reduced effective August 2011
- You must have a Compensation Claim against Nortel (i.e. you received an Information Statement through the Compensation Claims process)
In addition, you must demonstrate that you are in a situation of urgent or immediate financial hardship. Typical examples of financial hardship include the inability to cover your required drug costs, to pay your rent or to buy groceries. If you are experiencing hardship but you are unsure whether your situation qualifies under the expanded criteria, please contact Koskie Minsky at 1.866.777.6344 to discuss your situation.
Note: The maximum amount that will be payable to you under the expanded criteria is $5,000. It is not guaranteed that you will be approved for a payment, and if you receive a payment it may not be for the maximum $5,000 amount. Any amount that you do receive will be subject to applicable taxes, and the payment will be a lump sum advance on your distribution from the Nortel estate. To be clear, your ultimate distribution from the Nortel estate will be reduced by any amount that you are awarded from the Hardship Fund.
The updated Eligibility Requirements and the Hardship Payment Application Form will be available through the Monitor’s website at www.ey.com/ca/nortel, Koskie Minsky’s website at www.kmlaw.ca and the NRPC website at www.nortelpensioners.ca. If you have any questions, please contact Koskie Minsky at 1.866.777.6344.