Thousands of Kodak retirees may soon lose their health benefits.
The company filed a motion in court on Monday to end health care coverage for many of its former workers.
The move impacts medicare-eligible retirees 65 or older.
That means nearly 16,000 retirees could be affected.
Kodak says this will help them save $13.7 million dollars in 2012. After that, Kodak says it could save $20.5 million.
Healthcare is a rising cost for many companies.
For a company in bankruptcy like Kodak, it's a huge burden.
"A company in bankruptcy will do what it needs to do to cut costs and service," said George Conboy, financial analyst.
Kodak filed court papers to cut off retiree healthcare benefits.
In a letter to retirees and beneficiaries, Kodak wrote the following:
The motion filed by the Company would discontinue retiree benefits under Kodak's medical plan (defined in the motion as "Medicare Enhanced Benefits") for the following individuals who have attained age 65 (regardless of Medicare eligibility) or are under age 65 and Medicare eligible:
employees who retired on or after October 1, 1991;
Former employees who became eligible for long-term disability benefits on or after October 1, 1991;
Current employees who are retirement eligible when they leave the Company; and
Survivors and dependents of these individuals.
If approved, it could take place in May 2012.
Conboy says many have been anticipating that benefits would be reduced, but he says this comes sooner than many had expected.
"Kodak retirees feel like they worked and earned a benefit and those benefits are now being reduced," said Conboy.
Retirees can fight the motion in court.
A bankruptcy judge will decide what ultimately happens.
judge's job to look at all stakeholders and we think retirees will
have a lot to say," said Conboy.
A hearing is set for March 20 in New York City.
The Eastman Kodak Retiree Association or EKRA responded to Monday's court motion in a statement.
is extremely disappointed that Kodak made this determination without
discussion of alternatives with us. We have been working on such
alternatives for several months with our advisers and believe a more
suitable, cash saving option is available for Kodak. We will continue
to seek a cooperative relationship with Kodak despite this recent
"We were totally surprised by this action. After many months of attempting to collaborate with Kodak, and having received several signals from Kodak of their interest in working with EKRA, the timing of the meeting was scheduled at the same time as this motion being filed. We were blind-sided. Even though this behavior and lack of teamwork is a considerable disappointment, EKRA will continue its efforts to seek a win-win resolution for Kodak and retirees and will pursue our plans vigorously," said BobVolpe, EKRA President, in a statement.
EKRA says it has attorneys in Syracuse and New York City which are working on establishing a formal position for the retiree group."EKRA believes that Kodak's motion to terminate the retiree health plan conflicts with the bankruptcy statute protections limiting the alteration of certain benefit plans during bankruptcy. EKRA advisers will request that the judge require Kodak to negotiate with EKRA and representatives of the affected retirees to reach a more appropriate arrangement," Volpe said.
A link to the court paperwork can be found here.