All too often legacy issues for retiree health benefits burden otherwise attractive distressed investing opportunities. Retiree benefits were sometimes viewed as off limits in any out of court restructuring due, in part, to a legal presumption that came to be called “promise for life.” The U.S. Supreme Court’s recent decision in M&G Polymers USA v. Tackett reverses Sixth Circuit precedent and eliminates the presumption.1
While not a mandatory subject of bargaining, historically and currently companies and unions negotiate health benefits for current retirees as part of the collective bargaining process. Retiree health benefits are often expensive and beyond the control of the company. Not surprisingly, as companies tried to address the situation, the parameters on such benefits, including the duration, have been heavily litigated. Given technological advances, plant shutdowns and other cost-saving measures, companies may find that they support a disproportionately large retiree (as opposed to active employee) health care burden.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
