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Avaya Confirms New CEO, Pension Plan Strategy for Bankruptcy Court Hearing

Kevin Kennedy

Jim Chirico

Jim Chirico

Avaya COO Jim Chirico will succeed Kevin Kennedy as CEO, effective October 1, 2017. Avaya disclosed the CEO transition, preliminary Q3 2017 financial results, pension plan strategies, and next steps in its bankruptcy reorganization plan this morning.

On the executive front:

  • Kennedy, current president and CEO, will retire at the end of September but has agreed to remain as an advisor to the company. Under Kennedy, the company transitioned nearly 80 of its revenues to software and services. However, the company also went bankrupt amid the IT industry’s shift to cloud and mobile services.
  • Chirico joined the company in 2008. Most recently, he was COO and global sales leader, responsible for Operations, Global Sales, Sales Operations, Human Resources and Quality. Earlier, he held key posts at IBM and Seagate.

Avaya hopes to emerge from chapter 11 bankruptcy protection later this year. A court hearing on the company’s reorganization plan is set for August 23, 2017.

Avaya Amended Plan for Reorganization, Pension Plan Statement

In preparation for that hearing, Avaya today announced that it has develops an amended plan for reorganization, which has the support of major stakeholders, the company says.

Key terms of the Amended Plan, according to the company, include:

  • The reduction of debt by more than $3 billion from pre-filing levels;
  • The settlement and transfer to PBGC (U.S. Pension Benefit Guaranty Corp of Avaya’s obligations under the APPSE (Avaya Pension Plan for Salaried Employees);
  • The company’s continued support of its obligations under the Avaya Pension Plan (“APP”); and
  • Initiation of steps to enable the firm to emerge from chapter 11 as a public company.

We’re checking in with Avaya for a clearer definition of the company’s long-term pension plan strategy.

Preliminary Q3 2017 Results

Avaya this morning said fiscal quarter 2017 revenue is expected to be in the range of $802 to $804 million, approximately flat sequentially and a decline of 9% from the third quarter of the prior year. Adjusted EBITDA is expected to be in the range of $202 million to $206 million, or 25.1% to 25.7% of revenue.

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2 Comments

Comments

    Lloyd Rogge:

    Retried employees whether salaried or represented have given their all already, they have paid the price for previous success. Any decision going forward to reduce or discontinue retirement benefits, for those already retried , will degenerate the company’s ability to build a concrete and stable platform for future employment.

    Joe Panettieri:

    Hi Lloyd,

    We’ll continue to track the pension angle very closely. We’ve reached out to Avaya for comment about the pension plan’s status under this new Chapter 11 reorg plan. Once we hear something we’ll be sure to post an update. Thanks for your time and readership.
    -jp

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