Some 200 disabled Nortel workers have scored a legal victory over their former employer, which went bankrupt and is liquidating its holdings.
The workers earlier had won a nearly $27 million settlement for other benefits.
Nortel once employed some 8,000 people in RTP at the height of the Internet boom a decade ago.
On Tuesday, bankruptcy Judge Kevin Gross ruled the disabled workers were entitled to severance. Nortel had argued that the employees had left the company and were not employees, according to a report from Dow Jones.
“Judge Kevin Gross ruled in favor of Nortel’s long-term disabled, based, among other things, on notices Nortel sent out in 2010 saying the disabled were being terminated due to a workforce reduction,” Dow Jones reported. “Firing people, it seems, makes it tough to argue they aren’t employees.”
Nortel didn’t respond to request for comment from Dow Jones.
Nortel is wrapped up in court fights about more than $7 billion in assets to be divided among creditors.
In February, Gross had approved Nortel’s request to send details of the proposed accord to about 200 former U.S. workers. The company will return to court in a few months to ask for final approval of the settlement.
“We are all not overly happy, but we are glad that we moved to somewhere in the middle,” Lisa M. Schweitzer, a lawyer for Nortel, said in court at that time, according to Bloomberg news.
The company in January agreed to resolve a dispute with retirees by paying $66.9 million for medical and other benefits.
To help the disabled ex-workers get paid as soon as possible, the committee representing them agreed to sell their $28 million claim in the bankruptcy case to an investment fund, said attorney Rafael X. Zahralddin-Aravena of the law firm Elliott Greenleaf. The fund will try to collect as much as $28 million from Nortel that would have gone to the former workers once the bankruptcy case is over.
[NORTEL ARCHIVE: Check out more than a decade of Nortel stories as reported in WRAL Tech Wire.]
