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Navistar International Corporation Message Board

  • A Yahoo! User Dec 17, 2012 10:54 AM Flag

    US Appeals Court Finds Navistar Violated Benefits Agreement

    SILER, Circuit Judge. The class action plaintiffs (“Shy Class”) initiated the
    current litigation by seeking an injunction against Navistar International Corp.
    (“Navistar”), claiming that Navistar’s unilateral move to substitute Medicare Part D into
    their medical plan violated the parties’ 1993 settlement agreement (the “Agreement”).

    The district court found that Navistar’s actions were in violation of the Agreement and
    ordered Navistar to reinstate, retroactively, the prescription drug benefit that was in
    effect before Navistar made the unilateral substitution.

    The district court ordered Navistar to reimburse the plaintiffs for the
    premiums that had been paid in the interim and any extra cost for prescriptions that
    were filled under Medicare Part D.

    What will this cost??

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    • $33M from Mahindra will help pay for this fiasco.

    • 10K clearly says this has NO IMPACT.

      "In our opinion, apart from the actions set forth below, the disposition of these proceedings and claims, after taking into account recorded accruals and the availability and limits of our insurance coverage, will not have a material adverse effect on our business or our financial condition, results of operations, and cash flows."

      Sentiment: Buy

      • 3 Replies to A Yahoo! User
      • So, like, you're surprised that they (NAV) would lie? In a regulatory filing? LMAO - you probably believe Bill Clinton didn't have sex with that woman, either.

        Remember, Disingenuous Dan was the first CEO to be subject to a Dodd-Frank clawback, even before those two started dating. And, is the only one to be under investigation that could lead to a second.

        The first customer lawsuits have already been filed, alleging that NAV's bombastic and patently false PR blitzkreig led them into financially disastrous decisions. How far behind will shareholder lawsuits be? They obviously drank the Kool-Aid, too, given that the shares trade at levels utterly unsupportable with any conventional financial metrics.

        Sentiment: Strong Sell

      • If there is no impact, then why did Navistar switch the benefit plan in the first place?

        If there is no impact, then why did Navistar pay their attorneys to fight this and appeal the previous court decision that found Navistar had violated the Agreement?

        Of course it has impact.

        The Board, however, failed to disclose the impact and risks and costs to shockholders of this action.

        Isn't the Fed investigating Navistar for "disclosure issues"??? Just sayin'...

      • And you believe them?

    • This is the Disclosure. No indication at all of the magnitude of cost/risk associated with this legal action.

      "Retiree Health Care Litigation

      In April 2010, the UAW and others (“Plaintiffs”) filed a “Motion of Plaintiffs Art Shy, UAW, et al for an Injunction to Compel Compliance with the 1993 Settlement Agreement” (the “Shy Motion”) in the U.S. District Court for the Southern District of Ohio (the "Court"). The Shy Motion sought to enjoin the Company from implementing an administrative change relating to prescription drug benefits under a healthcare plan for Medicare-eligible retirees (the “Part D Change”). Specifically, Plaintiffs claimed that the Part D Change violated the terms of a June 1993 settlement agreement previously approved by the Court (the "1993 Settlement Agreement"). That 1993 Settlement Agreement resolved a class action originally filed in 1992 regarding the restructuring of the Company's then applicable retiree health care and life insurance benefits. In May 2010, the Company filed its Opposition to the Shy Motion.

      The Part D Change was effective July 1, 2010, and made the Company's prescription drug coverage for post-65 retirees (“Plan 2 Retirees”) supplemental to the coverage provided by Medicare. Plan 2 Retirees paid the premiums for Medicare Part D drug coverage under the Part D Change.
      In February 2011, the Court ruled on the Shy Motion (the “February 2011 Order”). The February 2011 Order sustained the Plaintiffs' argument that the Company did not have authority to unilaterally substitute Medicare Part D for the prescription drug benefit that Plaintiffs had been receiving under the 1993 Settlement Agreement. However, the February 2011 Order denied as moot Plaintiffs' request for injunctive relief to prevent the Company from implementing the Part D Change, because the change already had gone into effect. In February 2011, the Company filed a notice of appeal concerning the February 2011 Order.

      On September 30, 2011, the Court issued an order directing the Company to reinstate the prescription drug benefit that was in effect before the Company unilaterally substituted Medicare Part D for the prior prescription drug benefit (the “September 2011 Order”). The September 2011 Order also requires the Company to reimburse Plan 2 Retirees for any Medicare Part D premiums they have paid since the Part D Change and the extra cost, if any, for the retirees' prescriptions under the Part D Change. On October 14, 2011, the Company filed a notice of appeal concerning the September 2011 Order. Pending the appeal of the February 2011 Order and the September 2011 Order, Plan 2 Retirees will not pay premiums for Medicare Part D drug coverage and the prescription drug formulary available to such retirees will reflect the prescription drug benefit in effect prior to the implementation of the Part D Change."

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