After mediation fails, court fight over Nortel begins
By Tom Hals
WILMINGTON, Del (Reuters) - Bankrupt telecoms equipment giant Nortel Networks once boasted of a global operation, but now its former world-wide units are squaring off over its last remaining asset: $9 billion in cash.
Two judges, one in Wilmington, Delaware, and the other in Toronto, will jointly hear arguments on Thursday that will ultimately decide how, and when, to carve up that money.
The outcome will determine how much will be available for tens of thousands of retirees, governments and hedge funds investors.
"The issues which remain for decision are imposing," U.S. Bankruptcy Court Judge Kevin Gross of Delaware wrote on February 14 in an order scheduling the hearing.
The hearing was preceded in January by a third failed attempt to resolve the dispute through mediation. Warren Winkler, the chief justice of Ontario who oversaw those talks, said further attempts at mediation were no longer worthwhile.
He had warned before the final mediation that failure to reach an agreement could tie the disputes up in the courts for years, burning through Nortel's cash to pay the army of lawyers and advisers working on the case.
The last time the two courts heard arguments on the issue, 78 lawyers appeared, according to the court transcript.
The two judges will hear arguments on who should determine how to allocate Nortel's cash: the Delaware court, the Canadian court or an arbitrator. Continued...