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SOURCE Nortel Retirees and Former Employees Protection Canada
TORONTO, July 31st, 2014 /PRNewswire/ - Nortel Networks Inc. (NNI), the U.S. unit of defunct Canadian telecom company Nortel Networks Corp., has agreed that certain bondholders will receive up to approximately $1 billion in interest, over and above the approximately $3.9 billion of principal and interest on their bonds as of the date that Nortel commenced insolvency proceedings in Canada, the U.S., the U.K. and Europe, if NNI is solvent.
This agreement must be approved by the US courts before it is finalized.
The NRPC strongly objects to this proposed settlement as payment of interest to one group of creditors at the expense of all others in an international bankruptcy of this magnitude is clearly unacceptable.
If approved by the U.S. Bankruptcy Court, the agreement may dramatically impact the claims and eventual recovery for Nortel retirees in Canada, depending on the how the U.S. and Canadian Courts allocate funds from the lockbox proceeds realized from the sale of Nortel's business units and patents.
Don Sproule, President of the NRPC spoke out:
"This is a cooked up deal among friendly parties that support the vulture funds, with no support from other creditors, and with total disregard for Nortel's former Canadian employees who were the primary creators of the bulk of Nortel's patents which powered the once global company. Nortel's former Canadian employees deserve far better treatment.
The agreement dramatically increases the difficulty and expense of reaching a reasonable settlement between parties on allocation of the lockbox funds, does nothing to encourage any resolution, and fools nobody as to its intent.
We hope that both the U.S. and Canadian Courts see through this sham arrangement."
Nortel's former Canadian employees remain resolute in their determination to do all in their power and wait as long as it takes to receive an equitable share of Nortel's dwindling assets.
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