Nortel settles $7.3B asset fight but needs courts’ approval

Nortel, which went bankrupt in 2009, has reached an agreement under which the $7.3 billion in assets would be divided among its various business units.

The deal could mean more money for retired workers and creditors. However, the long battle is not over since the agreement must receive court approval.

The deal, which was announced by Nortel on Wednesday, calls for U.S. business units of Nortel to get 24 percent – some $1.8 billion. That’s substantially higher than the 11 percent agreed to as part of an earlier settlement, which U.S. creditors had fought. A settlement reached jointly last year in U.S. and Canadian courts had triggered more fighting.

Canada, where Nortel was based, gets the lion’s share of the revenue at 57 percent.

European businesses will receive 18 percent.

“The settlement ends appeals of the 2015 rulings that could have led to conflicting higher court decisions in Canada and the United States,” Reuters reported.

“It also comes as the U.S. dollar has rallied against the Canadian dollar, euro and British pound, inflating the value of the cash held in escrow for non-U.S. creditors.”

Nortel once employed several thousand people at a campus in RTP that is now occupied by Fidelity.

The telecommunications firm reached a court approved $67 million settlement with U.S. retirees in April 2013.

However, how Nortel would divide its assets has been a legal nightmare for its various business units and led to court fights across the U.S., Canada and Europe.

The $7.3 billion was raised through liquidation of assets, such as patents.

Nearly $2 billion has been spent over the past five years on legal fees as the fight has dragged on.