U.S., Canadian courts begin unusual trial over Nortel billions
By Tom Hals
WILMINGTON, Del May 12 (Reuters) - Judges in Wilmington, Delaware, and Toronto jointly kicked off a novel cross-border trial on Monday to divvy up the $7.3 billion that was raised in the liquidation of once-mighty telecoms equipment maker Nortel Networks, which went bust in 2009.
U.S. Bankruptcy Judge Kevin Gross and Ontario Superior Court Justice Frank Newbould heard opening arguments on Monday morning from four attorneys: two in Wilmington and broadcast in Toronto, and two in Toronto and broadcast in Wilmington.
The judges must decide how to allocate the money among former Nortel businesses in Canada, the United States and Europe. Administrators overseeing those former Nortel business units cannot repay creditors, make up pension shortfalls or pay off Nortel bonds until they know how much money they will receive.
The gallery pews in Gross's Delaware courtroom were replaced with eight large desks, each with two monitors, that allowed the attorneys to follow Newbould and oral argument in Toronto.
"Good morning Judge Gross, it's good to see you so clearly," said Matt Gottlieb, a lawyer at Lax O'Sullivan Scott Lisus, as he began his oral argument in Toronto. He appeared in one of three windows on each of the desktop monitors in Wilmington as well as on two large wall displays installed in the court.
At the company's height, Nortel's businesses spanned the globe, employed 93,000 people and had a market value of $250 billion. After accounting problems and a sluggish response to changing technology, the company filed for bankruptcy in 2009 and liquidated. Nothing remains but the billions raised, and disputes over how to divide it.
U.S. and Canadian courts occasionally hold joint bankruptcy hearings, but a full-blown trial with scores of witnesses has never been attempted, according to legal experts.
The trial, which runs till June 27, comes after the regional Nortel businesses have spent years in failed negotiations and mediation. Continued...