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May 16, 2002
Polaroid Retirees Cry Foul
Pol
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aroid, the Cambridge, Mass.-based camera maker that recently filed for bankruptcy protection, finds itself in a new dispute with its retirees over benefits.

According to the Boston Globe, lawyers for the former employees accuse the company of dragging its feet after agreeing to reinstate health and life insurance benefits.

Polaroid has replied that it hadn't yet reached an agreement with the retirees.

The retirees' lawyers said they negotiated a verbal agreement five weeks ago with lawyers for Polaroid, unsecured creditors, and bank lenders; it called for Polaroid to use money from an insurance settlement to partially pay for renewed benefits for the retirees. But Polaroid has failed to follow through, the lawyers said.

Polaroid lawyers "have jerked us around for long enough," said one of the retirees' lawyers, Al Gray. "We've stayed absolutely quiet for the last five weeks, and we're tired of waiting. We've been repeatedly told it's forthcoming."

Polaroid spokesman Skip Colcord said the company is still negotiating with the retirees but hasn't yet reached an agreement.

"We continue to negotiate in good faith and feel the [bankruptcy] court is the most appropriate forum for responding to the concerns of the retirees committee," Colcord said.

The Globe notes that Polaroid for years provided generous benefits for its retirees, paying most of their health care premiums and providing life insurance coverage. But Polaroid canceled those benefits on the eve of its Oct. 12 bankruptcy filing. The company said it could no longer afford the $20 million annual expense of the benefits.

That left many retirees, including some who were facing life-threatening illnesses, without health insurance for a time. Later, the Polaroid Retirees Association persuaded the company to sponsor a "Medigap" plan, which provides additional coverage to those over 65 for health care not covered by Medicare. Despite its sponsorship, Polaroid does not pay for the plan.

In January, according to the Globe, a group representing the retirees won full standing to participate in the bankruptcy proceeding in Wilmington, Del. The retirees committee has argued that because Polaroid didn't properly notify retirees of the cancellation of benefits prior to the bankruptcy filing, they were still in effect when the company sought protection from creditors. As a result, the retirees contend, only U.S. Bankruptcy Judge Peter J. Walsh can decide whether Polaroid can terminate the benefits.

Gray said he believed his group had reached an agreement that would reinstate the benefits, but Polaroid hasn't held up its end of the bargain.

To view the Boston Globe article, click here.


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