Ruling brings Nortel Networks bankruptcy case closer to end

Tue May 3, 2016 5:48pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

By Tom Hals

May 3 (Reuters) - A Canadian court on Tuesday closed the door on legal challenges to a ruling that divvied up the $7.3 billion raised from the liquidation of Nortel Networks, a former Canada-based telecoms equipment maker that went bankrupt in 2009.

The decision barred U.S. parties from appealing a May 2015 ruling by the Ontario Superior Court of Justice, which issued an opinion that was coordinated with the U.S. Bankruptcy Court in Wilmington, Delaware.

The two courts have been working in tandem to oversee the Nortel bankruptcy, and last year's simultaneous decision ruled that every creditor would receive roughly 71 cents on the dollar. That formula was advocated by representatives of Nortel's British pensioners, but opposed by the Nortel businesses in the United States and Canada.

"A further appeal proceeding in Canada would achieve nothing but more delay, greater expense and an erosion of creditor recoveries," wrote the Court of Appeal for Ontario, in a 42-page decision.

The Nortel bankruptcy case has cost more than $1 billion in fees for advisers and lawyers. During the case, more than 6,800 Nortel pensioners have died, and many of them have been living on reduced benefits due to the drawn-out legal fight.

Suppliers, former employees and government agencies cannot be paid until each particular Nortel unit in Canada, Europe and the United States knows how much cash will be available to distribute.

While Tuesday's ruling brings the Canadian proceedings to an end, an appeal before the U.S. District Court is pending. (Reporting by Tom Hals in Wilmington, Delaware; Editing by Cynthia Osterman)