If the matter goes to court, it could be dismissed by a judge.
Tops Markets continues to move through bankruptcy, putting the future of pension plans on the line for employees.
Even though the company is struggling to stay in business, some of its key bosses are getting millions in bonuses. News10NBC reported on the plan earlier this year and now a bankruptcy judge has approved it. More than 100 higher-ups are going to split $3 million if they stay with Tops through the end of 2018.
There is still another major hurdle the company has to tackle. Tops had previously reported one out of every 8 stores was not making enough money. It is still not clear which stores are going to shut down.
The company just reached a significant agreement with the union representing a majority of its workers. Now, the decision is in the hands of those employees who met Tuesday night in Batavia to vote on the matter.
UFCW Local One represents thousands of employees who have dedicated their careers to Tops. With the company's bankruptcy on the horizon, the union is fighting for the future savings for those employees.
"Since early April, UFCW Local One has been negotiating with Tops Markets and its' secured bondholders, Silver Point Capital, based in Greenwich CT," stated the union in an online release to members. "The negotiations are over the elimination of the defined benefit pension plan and a proper funding mechanism for a new 401k Plan. Silver Point Capital were the lead negotiator in this process because they will be the equity owners in Tops when it emerges from bankruptcy."
It goes on to explain that if the matter goes to court, it could be dismissed by a judge.
"The reason for that is the employer could make a motion they wouldn't survive a restructuring with that type of debt," explained Frank DeRiso, UFCW Local One president in a video posted to Facebook.
The union writes online, "During bankruptcy proceedings, judges routinely dismiss the debtor's pension debt obligations; because the liability is too burdensome for the debtor to overcome. In the Tops case, the funding of an adequate 401k Plan, with upfront seed money to be paid in a lump sum and then a weekly percentage based on age and service, was discussed."
In the video, DeRiso said, "The company decided it would no longer pay the full amount that was contractually negotiated. As a result, the fund immediately had an insolvency date. This is sometime between 2025-2026 as it stands now."
He went on to say, "We went out to negotiate the most money we could to try and obtain the contributions that were due to put in a 401k. So, members at least had additional money to grow and invest in the future as a retirement fund."
Members of Local One will vote on "whether or not to accept the new negotiated 401k seed lump sum and percentage contribution based on a member's age and years of service. At the meetings, members will learn their options. The union will announce any store closings they know of, and each member that comes to the meeting will learn what their seed money lump sum amount is, based on their age and years of service, and their weekly contribution percentage going forward."
The ratification vote will take place Aug. 7 through 9 in area cities. To see where the vote is in your area, click here. The union's full proposal can be found here.