Case 16-10163-KG Doc 1091 Filed 06/13/16 Page 1 of 4 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 VERSO CORPORATION, et al., Debtors. Case No. 16-10163 (KG) (Jointly Administered) OBJECTION BY STATE OF MICHIGAN, WORKERS' COMPENSATION AGENCY TO DEBTORS' THIRD AMENDED JOINT PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE The State of Michigan, Workers' Compensation Agency, by its attorney, Assistant Attorney General William F. Denner, hereby objects to the Debtor's Third Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code filed on May 10, 2016, (Plan) for the following reasons: 1. Out of an abundance of caution, Michigan's Workers' Compensation Agency files this objection in regards to Debtor's treatment of its workers' compensation obligations in its Plan. 2. The State of Michigan, Workers Compensation Agency (Agency), is an entity established to regulate and enforce Michigan s Workers Disability Compensation Act. (WDCA). MICH COMP LAWS 418.101 et seq. The Agency is a state agency and is responsible for regulating and
Case 16-10163-KG Doc 1091 Filed 06/13/16 Page 2 of 4 administering all aspects of the WDCA. In Michigan, all matters pertaining to workers compensation are governed by the WDCA. 3. One of the many responsibilities of the Agency is to determine which of the employers in the state qualify for the privilege of being selfinsured. MICH COMP LAWS 418.611. In Michigan, an employer has three ways in which it can fulfill its obligations under the WDCA. An employer can get a policy of insurance from a carrier authorized to write worker s compensation insurance in Michigan, (MICH COMP LAWS 418.611(1)(b)), pay its premium and comply with the mandatory coverage provisions of the WDCA, (MICH COMP LAWS 418.115); it can join an authorized group fund, (MICH COMP LAWS 418.611(2)); or, it can seek approval from the Agency to be self- insured, (MICH COMP LAWS 418.611(1)(a)). 4. In order for the Agency to authorize an entity to be self-insured, the employer must show it can meet all obligations under the WDCA including the payment of compensation benefits to injured employees as those employees become entitled to the benefits. It must demonstrate fiscal responsibility and viability and may be required to furnish a bond or other security to assure payment of its obligations under the WDCA, pursuant to MICH COMP LAWS 418.611(1)(a) and Administrative Rule, MICH ADMIN CODE R 408.43c. 5. Currently, Debtor enjoys the privilege of operating as a "selfinsured" employer under Michigan's workers' compensation system. At all 2
Case 16-10163-KG Doc 1091 Filed 06/13/16 Page 3 of 4 times during the pendency of this bankruptcy proceeding, Debtor has paid all of its workers' compensation obligations in Michigan. 6. However, the Debtors' Plan does not adequately ensure that the entirety of Debtors' workers' compensation obligations will be met. 7. This Debtor s Plan does not provide adequate assurance that Debtor will continue to meet all obligations under the WDCA. The Agency would accept the following language: State of Michigan Workers' Compensation Coverage. Reorganized Debtor shall assume all Michigan workers compensation obligations of Debtor. Reorganized Debtor shall be responsible for and pay any and all valid claims for benefits and liabilities required by the Michigan Workers' Disability Compensation Act (the Act), MICH COMP LAWS 418.101 et seq. for all injuries that occurred during the period of self insured status for Debtor. All such obligations under the Act shall be paid in accordance with the terms and conditions of workers compensation plans of Debtor in existence prior to and as of the Bankruptcy petition date and in accordance with State law. All assessments pursuant to Chapter 5 of the Act, whether incurred prior to or subsequent to the Bankruptcy Petition date, shall be paid by the Debtor or the Reorganized Debtor in full as an expense incurred in the ordinary course of business. 8. To the extent that the Debtors' workers' compensation obligations in Michigan are not adequately ensured, the Agency objects to the Debtors' Plan. If the Debtors' current language is not modified or if appropriate language is not added, the Agency may have no choice but to terminate Debtors' "self-insured" authority. 9. However, if Debtor is willing to include appropriate language as referenced in paragraph 7 above in the Plan regarding its workers' 3
Case 16-10163-KG Doc 1091 Filed 06/13/16 Page 4 of 4 compensation obligations in Michigan, the Agency will gladly withdraw its objection. WHEREFORE, Michigan's Workers' Compensation Agency prays that Debtors' Plan filed on May 10, 2016 be rejected, and that it have such other and further relief as is just. Respectfully submitted, BILL SCHUETTE Attorney General Dated: June 13, 2016 /s/ William F. Denner William F. Denner (P68875) Assistant Attorney General Labor Division Counsel for Michigan Workers' Compensation Agency 3030 W. Grand Blvd, Suite 10-660 Detroit, MI 48202 (313) 456-0080 4
Case 16-10163-KG Doc 1091-1 Filed 06/13/16 Page 1 of 1 UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 VERSO CORPORATION, et al., Debtors. Case No. 16-10163 (KG) (Jointly Administered) CERTIFICATE OF SERVICE (efile) I hereby certify that on June 13, 2016, I electronically filed the above document(s) with the Clerk of the Court using the ECF System, which will provide electronic copes to counsel of record /s/ William F. Denner (P 68875) Assistant Attorney General Attorney for Michigan Workers Compensation Agency Labor Division Cadillac Place 3030 W. Grand Blvd., Suite 10-660 Detroit, Michigan 48202 Telephone: (313) 456-0080 dennerb@michigan.gov