Wabush Mines – December 21, 2015
December 21, 2015
Calculation of claim amounts for terminated health, life, and other benefits
As you are aware, soon after obtaining CCAA protection on May 20, 2015, the Wabush CCAA Parties terminated the payment of health, life insurance, and other benefits to employees and retirees. The termination of those amounts generate claims for the losses to each individual in the claims process for creditors of Wabush in its CCAA proceeding. Given the nature of these types of benefits, an actuary is required to calculate the lump sum amount that reflects the loss of the future payment of these benefits to each individual. We have had discussions with the Monitor with respect to the calculation of these claims. In accordance with the procedure of the Claims Procedure Order, the actuary for the company, Towers Watson (“TW”) prepared a preliminary calculation of the claim amounts and sent those to us for review. Our actuary (Segal Company) reviewed those amounts and raised a number of concerns with the TW calculation methodology. On December 18, 2015, we sent a letter to the Monitor setting out the concerns of our actuary with respect to the TW calculations. To view a copy of our letter, please click here. We also filed a Notice of Dispute in the claims process in the CCAA proceedings with respect to the initial calculation of these claims by TW. To view a copy of our Notice of Dispute, please click here.
We expect to have continued discussions with the company, Monitor and the actuaries in an effort to settle the actuarial assumptions and methodology for these claim calculations. If an agreement cannot be reached, then the issue(s) in dispute will go before a Claims Officer for adjudication. Once the claim calculations are settled, we will send the claim amounts to each affected employee and retiree for review.
