Avaya Files Bankruptcy Yet Again

[Administrator]

Well, here we go again.

Avaya files bankruptcy once again.

You would have thought they would have learned the first time that if you take on too much debt this will happen.

I am sure the top brass will be fine though.

https://www.barrons.com/articles/avaya- ... s-af4ffdb7

[vernlarson]

To NRLN Avaya Chapter members:

Avaya and all of its U.S. subsidiaries filed voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.

General Information

On February 14, 2023, Avaya Holdings Corp. (“Avaya” or the “Company”) entered into a Restructuring Support Agreement (the “Financial Restructuring”) with overwhelming support of more than 90% of the Company’s secured lenders. The Financial Restructuring will enable the Company to:

• Eliminate more than 75% of its debt;

• Substantially increase Avaya’s cash and strengthen its liquidity position, including with approximately $780 million in committed financing;

• Move forward with one of the strongest balance sheets in the industry; and

• Position Avaya and its iconic brand for long-term success.

To efficiently implement the Financial Restructuring, Avaya and all of its U.S. subsidiaries filed voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.

During this process, Avaya will continue serving its customers and partners without interruption and providing them with outstanding solutions, service and support as usual. Implementing the Financial Restructuring will accelerate Avaya’s ongoing business transformation, significantly enhance its ability to invest in its innovative cloud-based communications portfolio and position the Company for long-term success.

The cases are pending joint administration under Case No. 23-90088 before the Honorable David R. Jones.

Additional information and FAQs for Avaya stakeholders are available at http://www.AvayaRestructuringInfo.com.

For inquiries, please call (877) 709-4751 (U.S./Canada) or (424) 236-7231 (International) or click here to submit an email inquiry.

See attached motions for today’s 9:00 AM CT virtual only – No-in-person attendance will be permitted. Motions cover all phases of continuing business including wages, benefits and Insurance.
Docket 10 is a NOL Motion - Emergency Motion for Entry of an Order Approving Notification and Hearing Procedures for Certain Transfers and Declaration of worthlessness with Respect to Common Stock and Preferred Stock. ( as expected stock-holders get wiped-out )

Respectfully submitted, Vern Larson – NRLN Avaya Retirees Chapter President

[adfranklin]

Will this new bankruptcy have any impact on retirees who've already had their pension taken over by the PBGC?

[Sid heath]

Good question on the PBGC, but the only benefit left is the life insurance--will that remain or can they get at the account that holds that money?

[jrevier]

Back during the last Bankruptcy Avaya was to pay ~7% into the PBGC as part of the "settlement" wonder if that will affect the pension as we now know and receive it. I do not remember if that was a 1 time 7% stock thingor on going.

[remberger]

Some quick answers.

1) This new bankruptcy will have no impact on the management pensions paid by the PBGC. That issue is closed.
2) Per Avaya’s Kirkland & Ellis attorneys, Avaya will continue to provide the management retiree life insurance. See my post under the pension topic
3) Avaya and the PBGC completed a negotiation prior to filing this latest bankruptcy. The PBGC got Avaya to retain the non management pension obligation. The PBGC gave up the stream of payments it had been receiving from Avaya. In any case, the management pensions paid by the PBGC were not tied in any way to that stream of payments.

Bob Emberger

[dlsirois]

What is the significance of the Opt Out form included in the bucket of legal information contained in the mailing? What are we "opting out" of??

[remberger]

Let me start with some caveats:
I am not a lawyer
I have had no legal training
What I choose to do may not be right for you

When you look at Avaya’s plan for reorganization, everyone who may have a claim against Avaya is but into one of several groups called classes. I believe that any claims we might have (e.g. management retiree life insurance) fall into class 6 - Non-HoldCo General Unsecured Claims. All class 6 claims will continue to owned by the new Avaya. We will not be impacted. (See my other posts under pension for my discussion with Avaya’s attorneys)

My understanding of bankruptcy law is that each “class” of creditors has two rights - the right to vote and the right to opt out of the proposed settlement and go to court to try to get a better deal.

With respect to the right to vote, bankruptcy law has complicated rules as to how many classes must approve the plan. Because our class is unimpaired, Avaya asserts we are for the plan. (I am). Therefore they are not required to conduct a vote.

With respect to opting out, each individual gets to make their own choice to try to make a better deal. The law says Avaya must ask, even though you are getting the best deal possible.

I DO NOT INTEND TO OPT OUT. I do not know what would happen if you do opt out. Probably nothing, but again I don’t know.

[Administrator]

In my opinion. Don't expect to get anything from these lawsuits. The only people who make out are the attorneys.

Lucent was sued years ago when they raided the pension fund. At least that is what I think it was for. In the late 90's the Lucent pension fund was way over funded and allowed Lucent to take millions out of it. Then the market crashed in 2000 and the pension was way underfunded and Lucent did not have to make up the loss.

The 'class' got less than 1% on the dollar and the attorneys literally made millions.

I sent a letter to the judge stating he should reject the claim based on how little the class was getting and how much the attorneys were making. Of course that did no good but I did get a call from the attorneys.

[Administrator]

To NRLN Avaya Chapter members:

Avaya and all of its U.S. subsidiaries filed voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.

General Information

On February 14, 2023, Avaya Holdings Corp. (“Avaya” or the “Company”) entered into a Restructuring Support Agreement (the “Financial Restructuring”) with overwhelming support of more than 90% of the Company’s secured lenders. The Financial Restructuring will enable the Company to:

• Eliminate more than 75% of its debt;

• Substantially increase Avaya’s cash and strengthen its liquidity position, including with approximately $780 million in committed financing;

• Move forward with one of the strongest balance sheets in the industry; and

• Position Avaya and its iconic brand for long-term success.

To efficiently implement the Financial Restructuring, Avaya and all of its U.S. subsidiaries filed voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.

During this process, Avaya will continue serving its customers and partners without interruption and providing them with outstanding solutions, service and support as usual. Implementing the Financial Restructuring will accelerate Avaya’s ongoing business transformation, significantly enhance its ability to invest in its innovative cloud-based communications portfolio and position the Company for long-term success.

The cases are pending joint administration under Case No. 23-90088 before the Honorable David R. Jones.

Additional information and FAQs for Avaya stakeholders are available at http://www.AvayaRestructuringInfo.com.

For inquiries, please call (877) 709-4751 (U.S./Canada) or (424) 236-7231 (International) or click here to submit an email inquiry.

See attached motions for today’s 9:00 AM CT virtual only – No-in-person attendance will be permitted. Motions cover all phases of continuing business including wages, benefits and Insurance.
Docket 10 is a NOL Motion - Emergency Motion for Entry of an Order Approving Notification and Hearing Procedures for Certain Transfers and Declaration of worthlessness with Respect to Common Stock and Preferred Stock. ( as expected stock-holders get wiped-out )

Respectfully submitted, Vern Larson – NRLN Avaya Retirees Chapter President

This statement by Avaya makes me sick to my stomach. They are literally bragging about how they screwed 75% of the people who loaned them money not to mention the people who were stupid enough to buy their stock and invest in their company.

Two bankruptcies in less than 6 years and they say they have an iconic brand!!!

They will probably do it again if they can convince mutual funds / ETFs / private individuals to loan them money and buy their stock.