Nortel Networks and the U.S. Pension Benefit Guaranty Corp have reached an agreement. This may finally pave the way to end its eight years in bankruptcy.
A trial had been set for January over the pension insurer’s claims against Nortel. Nortel’s pension plan ended in 2009 with 22,000 participants.
According to court papers filed yesterday, Nortel agreed the PBGC could receive up to $565 million once creditors start getting repayments. In return, the agency agreed to support Nortel’s bankruptcy plan.
Nortel is still awaiting the outcome of a vote on the plan, which would also have to be approved by U.S. and Canadian judges next month.
Nortel Networks was a premier Canadian telecommunication equipment manufacturer, dominating optical transport, voice switching, and other areas.
The bankruptcy legal saga has so far sucked about $2 billion away from the pot that is to be divided among the various Nortel creditors, including the pension funds.
For more details on today’s announcement see, http://www.reuters.com/article/us-nortel-ntwrk-bankruptcy-idUSKBN14B24K
I have provided many updates on this over the years. For additional background, refer to:
October 13, 2016: http://www.truepulse.com/nortel-reaches-bankruptcy-settlement/
November 5, 2015: http://www.truepulse.com/nortel-legal-fees-top-2-billion/
December 18, 2013: http://www.truepulse.com/news-nortel/