Joel R. Glucksman
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Judges Rule On Nortel Networks Bankruptcy Case
Author: Joel R. Glucksman
Date: June 17, 2015
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Judges in the U.S. and Canada recently ruled on the bankruptcy proceedings of Nortel Networks, providing some clarity in a saga that has lasted since 2009 when the telecommunications giant filed for protection from creditors.
In that time, several courts have considered the fate of Nortel Networks assets, causing fees of more than $1 billion to pile up, according to Reuters.
The latest trial – which involved judges from both the U.S. Bankruptcy Court in Wilmington, Delaware and the Ontario Superior Court of Justice – resulted in a ruling that will see regional businesses receive pro rata portions of the $7.3 billion that came from the liquidation of Nortel Networks, the media outlet reported.
In separate opinions, U.S. Bankruptcy Judge Kevin Gross and Canadian Justice Frank Newbould wrote that every regional business would receive a share of the $7.3 billion on the basis of its creditors’ claims relative to total claims across the world, according to the news source.
The judges opted for this ruling instead of approving any of the distribution schemes provided by the three competing Nortel groups that were representing creditors, Bloomberg reported. When the joint trial began in 2014, U.K. administrators for Nortel’s European units, the Canadian parent company and its U.S. unit all proposed different plans. However, the judges rejected all three proposals. In addition, they voiced their discontent because creditor groups could not agree to an allocation plan.
“The court can only speculate why the parties, all represented by the ablest of lawyers and sparing no expense, were unable to reach a settlement,” Judge Gross wrote in the opinion, according to the news source. He went on to say that the regional businesses “have lost sight of the irrationality of their respective positions.” Finally, he stated that the different parties involved left “virtually no middle ground.”
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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