Nortel Retirees and Former Employees Protection Canada (NRPC) strongly objects to the proposed settlement between the American division of Nortel Networks and some of its bondholders.
The U.S. division, Nortel Networks Inc., 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 United Kingdom and Europe, if NNI is solvent.
“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,” says NRPC president Dan Sproule. “Nortel’s former Canadian employees deserve far better treatment.”
If approved by the U.S. bankruptcy court, the NRPC says 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.
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