Travelaire

This web page is to keep our members in Red Deer updated on the happenings at their operation. As we get news we will post it here.

There is one major recent development to report on. As of last Thursday evening, a sale was completed which addressed the shares in Firan which were held by the trustees. The bulk of the shares were sold to an entity named Oakwest Capital. You can see the press release here.

This came after several times rejecting lower offers for the shares in order to maximize value for the beneficiaries of the estate.

In addition, there is some news to report about the pension. This from the pension folks:

In addition to that news, there is also some news about the Travelaire name. We had previously reported that the ‘intellectual property’ of the bankrupt estate had been purchased. It has recently come to light that none other than Barry Bateman was involved in that purchase, and he is now licensing the Travelaire name to a U.S. based manufacturer.

Finally, we can report that there are still a number of complex issues the trustees and inspectors are working through, including the sale of Glendale’s former manufacturing property in Ontario, the conclusion of a mortgage held by Glendale on land in Ontario that has some environmental liability attached to it, and a legal liability issue relating to units that were manufactured prior to the bankruptcy.

As these issues are resolved, we will keep you posted. Unfortunately, this could still take some time to conclude.

Sister Reay asked us to remind everyone to please ensure they fill out their election forms that they received from Morneau Sobeco back in August. These forms are an important part of your retirement and need to be returned by November 30, 2010.

As for the rest of the bankruptcy issues - very little has happened lately and there are still several large issues that need to be addressed by the trustee prior to the overall bankruptcy being resolved. Those issues include dealing with Glendale's ownership of shares in another company and real property (land) in Ontario. In addition, there are some complex legal issues relating to warranty / liability on both product and environmental issues that are still being worked through.

We have heard back from the pension folks... here is what they sent in an email:

Well, there hasn't been much news. The auction went at both locations (Alberta and Ontario) as planned and it appears that we did slightly better than expected. In addition, the trustees were able to sell the 'intellectual property' of the company to another manufacturer, which is something we did not expect to see any proceeds from at first.

We are still in the process of trying to recover money from mortgages, land and shares, which (as reported before) will take some time to achieve. As well, some of the outstanding invoices will have to be collected over time, as the people who owed money to the company were on terms for payment and are unable to come up with the whole amount all at once. These things move slowly.

The pension plan wind up date was set at January 19, 2010 and any members who wish to start their pensions may file paperwork, but the pensions won't proceed until the Alberta Superintendant of Pensions gives their approval to the final paperwork. We have not heard when that might be.

Our eagle eyed Karen spotted the auction signs at Travelaire earlier this week. Here is a copy of the advertisement.

As reported earlier, there was an issue about the trustee deducting the EI overpayment from everyone’s vacation pay last week. I sent an email to the trustee to get some clarification on the situation and I am letting you know the response I got.

The issue I posed was that some of you have already made arrangements to pay the overpayment back, which resulted in a double payment to EI since the trustee now also removed the overpayment. Here is what the trustee suggests you do if that is your particular situation:

“... it sounds to me like the employees should give the EY remittance payment, made to HRSDC on behalf of the employees, some time to work through the HRSDC system and then the employees should call HRSDC and explain to HRSDC that it was paid twice for the same overpayment and make arrangements for the employee to be reimbursed. By then HRSDC should see EY's remittance in the HRSDC system and the person on the enquiry line will have the ability to assist.”

Please note that the trustee filled out the wrong date in box 27 on the WEPPA forms here. The year should be 2010, not 2009. Please make the change before sending the form in. If you have already sent the form in, you may wish to re-submit it with the corrected year, and write "CORRECTION" on the top of the form.

I tried to send an email last night, but it got rejected by Microsoft’s (Hotmail) email servers so many of you didn’t get it… what I tried to send was to tell you that we are attempting to get some clarification on whether the WEPPA claim should be submitted or not, since there are some discrepancies over the totals.

Our lawyers got back to us today that the members SHOULD GO AHEAD AND FILL OUT YOUR WEPPA CLAIMS RIGHT AWAY and that we would deal with the dispute outside of the WEPPA process.

The best way to do this is online at http://www.servicecanada.gc.ca/eng/online/index.shtml

If you can’t do it online, then fill out a paper form (here) and send it in. If you think they might get it late, put in box 20 of the form “Didn’t receive package until just prior to submission deadline”

Again, PLEASE SUBMIT YOUR WEPPA CLAIM RIGHT AWAY!

NOTE - RETIREES DO NOT FILL OUT WEPPA FORMS.

More information to follow.

It has been brought to our attention that the reason that the reason EI is potentially reevaluating your claim and benefits is because the government requested a list of employees and monies owed to them from the trustees, NOT because of the handling of the ROE's. We apologize for any confusion this may have caused.

Here is the document that was handed out to creditors on Monday at the first creditor's meeting in Strathroy.

Just a reminder that we are having meetings today THURSDAY, FEBRUARY 11th at 3:30 p.m. and 6:30 p.m. at the NORTH HILL INN, in the Kentwood Room. The North Hill Inn is at 7150 50th (Gaetz) Ave.

These meetings are open to all Travelaire employees who were members of the Steelworkers (or IWA) and who were either employed as of the notice of bankruptcy or who have a pension benefit of some kind owed to them.

We have learned that as a result of how the R.O.E.'s were handled recently, EI may reevaluate your claim and benefits, and they may determined that there is an overpayment as a result of the vacation pay (which you haven't actually received yet due to the bankruptcy and that money being withheld).

We believe that if they recover it now, it means that when you do finally get that money after the bankruptcy and creditor claims get sorted out, you should not have to claim it then. You may wish to clarify this with EI if and when your benefits get reduced.

Karen Reay was informed by Anne St. Jean that benefits claims will be accepted up to the end of January, so submit your claims right away!

Our legal department has informed us that they submitted the overall claim on behalf of all members to the bankruptcy trustee today. As well, a Steelworkers representative will be attending the first meeting of creditors in London, Ontario on Monday. We will have an update for the members at the meeting on the 11th.

Also, the Manulife office in Calgary has closed, so members who still have receipts to send in, or if the claims they have sent get returned by the post office, the new address to send claims to is:

We have received word from our legal department in Toronto that the bankruptcy trustee has approved for them to file a single consolidated claim on behalf of all members, so individual members do not have to file their own claims.

Any member wishing to claim their medical file from Travelaire should go to the office and request the same. This has been discussed between our Steelworkers legal department and Philip Kan of Ernst and Young. Files which are not claimed by the members will be taken by the trustee to their offices in Toronto and sealed.

Also, we have booked a meeting for THURSDAY, FEBRUARY 11th at 3:30 p.m. and 6:30 p.m. at the NORTH HILL INN, in the Kentwood Room. This will be to discuss the situation with the membership and to hopefully answer some of the questions that are out there. We encourage all members who have a claim against the bankruptcy or who are currently drawing pension to attend, as the bankruptcy directly affects you.

There will be 2 special sessions held at the Career Assistance Network (CAN) in Red Deer on February 2 from 7-9 p.m. and on February 4 from 7-9 p.m.

You must pre-register at 403 341 7811 - please mention that you are from Travelaire when you call.

The sessions will be held at #18 4712-50 Street in Red Deer. (South end of the CoOp Plaza Mall).

Some of you are likely under the impression that your benefits will be active for the month of January. It has come to our attention that the benefits provider is telling members that the benefits ceased on January 18th. If you have purchased products or services with the expectation that you will be getting some or all of it back from the benefits provider, submit your claim as normal, but expect that it might be denied by the provider. In that case, we are suggesting you make the products or services part of your overall bankruptcy claim. More information will come out about that soon, as we are waiting to see how the bankruptcy creditors claims will be processed.

As many of you have already heard, Travelaire's parent company Glendale International has filed for bankruptcy on January 19, 2010. This was not a bankruptcy they were forced into by creditors but rather a voluntary assignment in bankruptcy.

This move impacts both the membership we had working at the end, and the membership who has already retired and is drawing their pension. For existing members it is a matter of ensuring that all monies owed to you including any outstanding vacation pay, outstanding wages, and severance pay come to you as they should. For current and future pensioners it is a matter of doing what we can to ensure the plan has enough fund to provide the required pension entitlements.

As of the filing of the bankruptcy the pension plan was in a "solvency deficit" position, which means there wasn't enough money in the bank to pay for all the pension obligations if the plan was to windup. This was in large part due to the collapse of financial markets and record low interest rates. The papers filed by Glendale show that there should be enough money recovered through the bankruptcy to put the pension plan in a position of being very close to fully funded. It remains to be seen if there are actually enough assets to make that happen.

Complicating things are an outstanding loan to a group made up of mostly managers of the company in 2007 for over $4 million dollars. That loan was made to purchase shares in the company and yet it is not listed as an asset of the company needing to be paid back. The Union has been contacted by interested shareholders who feel that this was a shady move on Glendale's part and they are looking into what they can do about it. More on that in the Financial Post article below.

We have been in contact with the Steelworkers legal department in Toronto and they are working on the file.

As we monitor this situation, we will post information here that will be of interest to our members. As well, we will be calling a meeting in the near future in Red Deer to discuss the situation.

In the meantime, and to be sure to be notified of any news relating to the operation, please call our office at 780 463 9070 to ensure we have your correct mailing address and contact information on file, or send an email to travelaire (at) steel207 (dot) ca with your name in the subject line and your complete mailing address and phone contact information in the body of the email.