Pensions Team Wins Legal Business Team of the Year Award
17 February 2014
We have won the 2014 Legal Business 'Employment, Pensions and Benefits Team of the Year' award.
Announced at a gala dinner at London's Grosvenor House Hotel on 13 February, the award recognises our work advising the Kodak Pension Plan (KPP) Trustees on an innovative pensions restructuring which saved 15,000 members from the Pension Protection Fund (PPF).
Our work for the KPP Trustees set us apart for three principal reasons: it was the biggest, most strategic pensions deal of 2013; it was as an innovative solution, acquiring two businesses from Eastman Kodak Company (EKC); and the bulk reduction of accrued pension rights was an industry first.
In January 2012, EKC, the guarantor of Kodak Limited (its UK subsidiary's) obligations to KPP, filed for Chapter 11 bankruptcy protection in the U.S., resulting in the Trustees filing unsecured claims for US$2.837 billion against EKC.
After extensive negotiations, our cross-practice, cross-border team advised the KPP Trustees on the implementation of a comprehensive settlement, including the acquisition of EKC's Personalised Imaging and Document Imaging businesses in an elaborate carve-out transaction extracting the relevant assets from over 50 EKC entities worldwide. The businesses, valued at US$650 million, were acquired through a mixture of release of claims and $325 million cash. Over time, these businesses are expected to eliminate KPP's deficit.
Just one of the innovative solutions developed by the team was the invention of a structure to reduce benefits to make them more affordable, and to create a situation where members were likely to consent to lower benefits. The PPF were persuaded to take on members who objected, so the existing expensive benefits ceased to be an option.
Rather than seeking approvals to reduce benefits, we proposed a transfer with consent to a new plan. This method of bulk benefit reduction is an industry first.
We also advised on the communication of this new plan to 15,000 scheme members. We were pragmatic in suggesting alternative voting methods. Partners Katie Banks and Chris Donoho toured the country explaining the new plan to over 2,500 KPP members, giving over 33 hours of presentations. These efforts helped achieve a successful vote of members representing 92% of the liabilities.
Our team include over 300 lawyers from over 11 different practice areas (including pensions, business restructuring and insolvency (BRI), M&A, commercial, tax, employment, IP, real estate, environmental, finance, and antitrust and competition) across 20 offices in Europe, the U.S. and Asia.
London pensions partner Katie Banks led the deal team, supported by associate James Davis, with significant contributions from U.S. partner Christopher R. Donoho III and associate Daniel Lanigan on business restructuring and insolvency matters; and partners John H. Booher, Michael J. Silver, and Derek B. Meilman on M&A matters.