Tower Automotive retired employees reach settlement with company
Clients Official Committee of Retired Employees of Tower Automotive
Jones Day represented the official committee of retired employees of Tower Automotive and its constituents in the Tower Automotive (Tower) chapter 11 cases in connection with the efforts of Tower to modify the health and welfare benefits of its nonunion retirees pursuant to section 1114 of the Bankruptcy Code. After several months of negotiations and a full trial regarding Tower’s section 1114 motion, the retiree committee and Tower reached a settlement calling for the creation of a Voluntary Employee Benefits Association (“VEBA”) trust to fund and administer future benefits. In addition to payments made by Tower on a quarterly basis to the VEBA prior to the effective date of its plan of reorganization, Tower’s successor in interest agreed to contribute $80,000 on July 1, 2007 and $300,000 on each October 1, January 1, April 1 and July 1 thereafter for a total of 16 payments in the aggregate amount of $4,800,000, subject to certain adjustments. The retiree committee represented approximately 200 retired salaried workers and their dependents.