Nortel Networks talks on dividing cash from sales end
By Tom Hals
(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.
The mediator who oversaw the Toronto talks, Warren Winkler, the chief justice of Ontario, had called Nortel's insolvency "one of the most complex transnational legal proceedings in history.
His three-sentence statement on Thursday merely said the mediation ended and he did not think further talks were worthwhile.
Winkler warned when he initiated the mediation in April that if talks failed, it could lead to years of litigation with courts in different countries coming to contradictory rulings on the same issue. Continued...