RESEARCH TRIANGLE PARK, N.C. – Nortel’s business unit that includes many of its remaining RTP area employees is a major step closer to being sold.

Bankruptcy courts in the U.S. and Canada granted initial approval Tuesday to Avaya’s proposed purchase of Nortel’s Enterprise business unit for $475 million, Reuters and Bloomberg news reported.

, which filed for bankruptcy in January, is inn the process of selling off its assets. The court decision in favor of the deal now sets the stage for an auction process.

A similar procedure led to Nortel’s sale of its primary wireless assets to Ericsson for more than $1 billion.

The court decision grants Avaya, which is a Nortel competitor, “stalking horse” status in the bidding process. Avaya will have a chance to match other offers.

Nokia Siemens had posted the first “stalking horse” bid for the wireless group but lost out in the bidding with Ericsson and a New York-based private equity group.

According to news reports, Nortel had to resolve 10 objections from a variety of sources before the Avaya bid could move forward.

"The business needs to be sold to preserve and maximize value for all stakeholders," said Derrick Tay, an attorney representing Nortel in Canada, said, according to Reuters. "The intricacies of trying to sell this outside of a (bankruptcy) filing were too difficult to achieve."

“There is no question this business needs to be sold in order to preserve maximum value for all stakeholders,” he added, according to Bloomberg.

James Bromely, representing Nortel in the U.S., noted that Nortel’s business was deteriorating.

The court proceedings were linked by video.

Avaya also would gain control of Nortel’s Government Business Solutions unit.

An auction is set for Sept. 11. Bids must be received by Sept. 4.