Nortel Networks talks aim to end $7 billion legal fight
By Tom Hals
(Reuters) - Parties seeking a chunk of the $7 billion raised from the liquidation of former telecommunications giant Nortel Networks started talks on Thursday aimed at ending one of the most complex and costly legal disputes in history.
The money has been sitting in a New York bank account since Nortel Networks global businesses were sold piecemeal after the Ontario-based company filed for bankruptcy exactly seven years ago.
Nortel ranked among the world's most valuable companies during the Internet bubble at the end of the 1990s, but missteps and an accounting scandal left the company bankrupt and unable to turn itself around.
The talks on Thursday in New York include representatives from former Nortel operations in the United States, Canada and Europe, according to two sources who declined to be identified because the mediation was confidential.
The parties had presented dramatically differing proposals to a judge in Ontario and a U.S. Bankruptcy judge in Delaware during a novel, joint trial in 2014 aimed at dividing the cash. The court rooms were linked by cross-border video.
The judges issued coordinated opinions in May that rejected the proposals from the various Nortel estates and ruled that every creditor would receive roughly 71 cents on the dollar, a position backed by some creditors.
That sparked appeals. If the current talks can reach a settlement to divide the cash, it would end the appeals process. One of the big fears among the parties is that parallel appeals in the United States and Canada could result in conflicting rulings that further complicate the dispute.
"It's a Charles Dickens novel," said Melissa Jacoby, a law professor and resident scholar at the American Bankruptcy Institute. Continued...