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Judges approve $7.3M in bonuses for eight Nortel execs

Nortel gets OK for bonuses

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• Nortel’s next chapter: $22M in bonuses for some; ‘agonizing deal’ for others

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• Bloomberg report
• Toronto Star report

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Bankruptcy courts in the U.S. and Canada approved Nortel’s request to pay $7.3 million in bonuses to eight company executives despite protests fro some laid-off workers.

The former Nortel employees, who lost their severance benefits when Nortel filed for bankruptcy in January, said the bonuses were unfair.

Nortel has been seeking court approval to pay bonuses totaling $45 million as incentives to keep executives and other employees with the company.

Bloomberg and the Toronto Star reported the judges’ decision Friday afternoon.

Chief Executive Officer Mike Zafirovski isn’t on the list of eight top execs, according to Canadian media reports.

Nortel attorney James Bromely said the bonuses were needed “because of the high level of expertise for those individuals,” according to Bloomberg.

“The board cannot properly function without the advice of its senior, experienced, leadership team,” Lyndon Barnes, a lawyer for the Nortel board of directors, said, according to Bloomberg “This is an enormously complicated task.”

Some 422 million in bonuses were approved by the courts on March 6.

However, lawyer Eli Karp, who is representing laid-off Nortel workers, argued against the bonuses.

“In the context of the global financial climate the way it is today, our clients object to millions of dollars of bonus payments being made,” Karp said, according to the Toronto Star.

“Our clients are now on the government employment insurance payroll and at the same time, the company seeks to pay millions of dollars to its executives while leaving employees not receiving their severance payments,” he added.