In Kodak's case:

The biggest risk with a nonqualified deferred compensation plan, as explained in the Funding: Security section of myNQDC.com, is the possibility of the company's bankruptcy. The Chapter 11 bankruptcy filing by Eastman Kodak raises questions about what will happen to the amounts deferred into its nonqualified retirement plan and what actions the company and its executives have been taking in relation to the plan during the past several years. Kodak's Actions The plans covered are the elective nonqualified deferral plan and the two unfunded ERISA excess plans (see pages 60–62 of its 2011 proxy statement). Kodak had frozen the receipt of new deferrals for existing participants and newly eligible participants beginning with the 2007 plan year. Until its bankruptcy, Kodak had left distributions as scheduled and had not terminated its elective plan. All distributions from the plans stopped on the date of the bankruptcy filing. We have learned that all participants were informed that their interests will become an unsecured claim in the Chapter 11 proceedings and that they will receive instructions on how to file a claim in the future. Executives' Actions We have been unofficially told that, over the past few years, concerns about Kodak's financial condition led many executives to take accelerated distributions from the nonqualified plan with a 10% "haircut" in their NQDC accounts for amounts that were deferred and became vested before January 1, 2005. For amounts vested or deferred from that date forward, the notorious Section 409A of the Internal Revenue Code makes it just about impossible to accelerate distributions of any future deferrals. That is why most NQDC plan providers have set up segregated accounts for pre-2005 deferrals and deferrals after January 1, 2005. Kodak has also been paying the ERISA excess unfunded pensions to executives as lump sums upon separation without exception for several years.