Note 3: Liabilities Subject To Compromise

12 Months Ended

Dec. 31, 2012

Liabilities Subject To Compromise [Text Block]

NOTE 3:LIABILITIES SUBJECT TO COMPROMISE

The following table reflects pre-petition liabilities that are subject to compromise.

(in millions)	As of December 31, 2012
Accounts payable	$	283
Debt		683
Pension and other postemployment obligations		785
Settlements		710
Other liabilities subject to compromise		255
Liabilities subject to compromise	$	2,716

The Bankruptcy Filing constituted an event of default with respect to certain of the Company’s debt instruments. Refer to Note 11, “Short-Term Borrowings and Long-Term Debt” for additional information.  Settlements relate to allowed claims under agreements reached with various creditors, including $650 million related to the settlement agreement reached with the Retiree Committee.  Refer to Note 1, “Bankruptcy Proceedings” for additional information.  Other liabilities subject to compromise include accrued liabilities for customer programs, deferred compensation, environmental, taxes, and contract and lease rejections.

The amount of liabilities subject to compromise represents the Debtors’ estimate, where an estimate is determinable, of known or potential pre-petition claims to be addressed in connection with the bankruptcy proceedings.  Such liabilities are reported at the Debtors’ current estimate, where an estimate is determinable, of the allowed claim amount, even though they may settle for lesser amounts.  These claims remain subject to future adjustments, which may result from: negotiations; actions of the Bankruptcy Court; disputed claims; rejection of contracts and unexpired leases; the determination as to the value of any collateral securing claims; proofs of claims; or other events.  Refer to Note 1, "Bankruptcy Proceedings" for additional information.