SWM » Topics » Events Subsequent to September 30, 2006 Not Reflected in the Accompanying Financial Statements.

This excerpt taken from the SWM 10-Q filed Nov 7, 2006.
Events Subsequent to September 30, 2006 Not Reflected in the Accompanying Financial Statements.  On October 18, 2006, the first meeting among PdM management, unions and the Work’s Council occurred related to the planned restructuring.  The negotiations with PdM’s unions and Work’s Council are proceeding under a mutually agreed upon schedule and protocol.  The negotiations are expected to conclude by mid-December 2006.  The proposal from the Company calls for the shutdown of 2 paper machines and the reduction of 209 employees, or approximately one-fourth of the PdM workforce.  The reductions are proposed to occur in essentially 2 equal phases during the first and fourth quarters of 2007.  At this meeting, PdM offered severance payments in excess of the French legal minimum.  Approximately $9 million of estimated additional severance liability, which is incremental to that recorded in the third quarter, will be recorded during the fourth quarter.  This incremental severance amount will be amortized to restructuring expense over the affected employees’ remaining service periods during 2006 and 2007 in accordance with SFAS 146.  The estimated amount of severance liability could change, dependent upon the results of negotiations and the mix of employees that leave through early retirement or other voluntary means versus involuntary separation.

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