UPDATE 1-Nortel Networks talks on dividing cash from sales end

Thu Jan 24, 2013 5:53pm EST
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* Mediator says cannot see continuing talks

* Failed mediation could lead to years of litigation

* Creditors have been waiting four years for money

By Tom Hals

Jan 24 (Reuters) - Talks to divide $9 billion raised from the sale of businesses of Nortel Networks, the telecoms equipment maker that went bankrupt in 2009, ended without agreement, and the mediator said on Thursday further discussions were no longer worthwhile.

The failure of nearly two weeks of talks in Toronto raises the prospect that disputes among various creditors and retirees around the world could lead to years of litigation over how to divide the cash.

Nortel was once the largest telecoms equipment maker in North America with a market value of $250 billion, but it never recovered from the burst of the 1990s technology bubble.

After the company filed for bankruptcy in 2009, it decided to wind down operations. The cash raised from selling its various businesses are now at the center of the dispute.

However, while the businesses were sold on a global basis, the question of how to divide that money among U.S., Canadian and European bankruptcy and insolvency proceedings was left unresolved.   Continued...