Former employees of Nortel Networks in Canada are looking to reclaim their share in the allocation of the company’s global estate, but only on a fair and equitable basis.

Nortel Retirees and Former Employees Protection Canada says the heart of the dispute over the company’s estate is with its current bondholders.

The group claims that bondholders are trying to make the U.S. estate solvent, which would force the company to pay interest on the bonds since filing for creditor protection as well as leave less money to go to Canadian creditors.

The allocation dispute is now heading to court. That hearing will begin on May 12 simultaneously in courts in Toronto and Delaware and is scheduled to finish at the end of June.

About 22,000 former employees of Nortel in Canada, including its pensioners and those on long-term disability, have already had their pensions reduced. Some were immediately after the Companies’ Creditors Arrangement Act filing in January 2009, while the most recent round in August 2011 had pensions cut back to 55% to 70% of their former level.

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Maurice Savaryego:

It is an utter disgrace and shame that Nortel retirees would even have to compete with greedy speculators such as junk-bond holders. Retirees in the UK and the US were protected by federal pension protection plans, while Canadian retirees lost so far from 55% to 70% of their pensions. And now these vicious speculators want to get rich at the expense of more Canadian retiree misery. Where is justice? Where is the government?

Sunday, May 04 at 11:15 am | Reply

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