Nortel Networks Inc., the telecommunications company being liquidated in bankruptcy, won court permission to hire a mediator to try to resolve a dispute over how to wind down its pension plan.
U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, approved a 60-day mediation period, during which Nortel, once the largest telephone equipment maker in North America, must negotiate with two committees representing retirees and workers who receive disability payments.
Last month, Gross ordered Nortel into mediation with its European units in a larger battle over how to split more than $7 billion the U.S. and Canadian units have collected by selling assets, including 6,000 patents to a group led by Apple Inc. and Microsoft Corp.
The dispute over pension and disability payments will probably be much easier to resolve and shouldn't interfere with the mediation between the European and U.S. units, said Albert Togut, the lawyer for the committee of Nortel retirees.
“The likelihood is that this is going to be done before the 'Queen Mother' of all mediations,” Togut said in court.
Nortel has spent about $20 million on retiree benefits in the past two years, company bankruptcy attorney James Bromley told Gross.
The company will eventually need to cancel the pension plan and the program under which disability payments are made to former employees, Lisa G. Beckerman, an attorney for a committee of unsecured creditors, told Gross.
“We are going to have the termination of these plans because at some point there won't be a company,” she said.
Since filing for bankruptcy in 2009, Nortel, based in Mississauga, Ontario, has sold all of its major businesses and is preparing a plan to divide the proceeds among creditors.
The case is Nortel Networks Inc., 09-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).
Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
