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Local Tech Wire, AP

RESEARCH TRIANGLE PARK, N.C. – Another piece of bankrupt is officially headed for the auction block.

Maryland-based (Nasdaq: CIEN) received court approval in the U.S. and Canada to start a bidding process for Nortel’s optical and metro Ethernet division with an offer of $532 million.

Ciena has offered to hire most of the 2,000 employees in that unit.

Nortel still has some 1,700 employees at its RTP campus, but most of those are involved in other units than metro and Ethernet.

The auction was set for Nov. 13 with a deadline for bid submission of Nov. 9.

In two previous auctions, Nortel received higher prices for its wireless and enterprise business units than the original bids.

Creditors had complained the rules gave Ciena, the lead bidder, too much power over the auction process.

"We understand that there were changes to the bidding procedures and a change to the termination provisions of the stalking horse agreement," Nortel spokesman Bo Gowan wrote in an e-mail.

Ciena spokeswoman Nicole Anderson confirmed the court approval, but also did not provide any details.

According to a statement from Nortel, 85 percent of its 2,000 employees in the Optical Networking and Carrier Ethernet business would be offered jobs with Ciena.

“Today’s announcement is a positive step forward for the future of Nortel’s Optical Networking and Carrier Ethernet customers and employees," said Philippe Morin, president of Metro Ethernet Networks for Nortel, said when Ciena and Nortel reached their original deal to start the bidding. "The sale of these businesses to a strong and stable buyer enables the innovation of one of the foremost leaders in the optical industry to continue to thrive.

“Employees have done a tremendous job stabilizing our business under challenging conditions while continuing to deliver on product and service commitments,” he added. “We are particularly pleased that the agreements would offer a significant number of the employees in the Optical Networking and Carrier Ethernet teams an opportunity to continue their world-class innovation.”

Despite Nortel’s ongoing bankruptcy, which it declared in January, the Optical Networking groups has recorded 52 “wins” this year for its 40-gigabit networking solution and is continuing field trials of its 100-gigabit solution that is planned for release later this year.

The Optical Networking business includes some of Nortel’s most sought-after businesses units, intellectual properties and employees.

Nortel filed for bankruptcy protection in Canada and the U.S. in January.

Last month, Nortel announced its Enterprise Solutions division would be sold to New Jersey-based Avaya for $900 million. Avaya had originally bid $475 million in July but sweetened the offer to win an auction that began Sept. 11 and lasted several days.

Prior to that, LM Ericsson of Sweden agreed to pay $1.13 billion for Nortel’s wireless network business, beating a $650 million stalking horse bid put forward by Nokia Siemens, a joint venture between Finland’s Nokia Corp. and Germany’s Siemens AG.

Ciena’s cash-and-stock bid covers substantially all of the fallen Canadian technology giant’s Optical Networking and Carrier Ethernet businesses, including the rights to technology that enhances the speed and capacity of current fiber optic networks by as much as 10 times.

The optical and carrier ethernet business units are part of Nortel’s Metro Ethernet Networks. Not included in the sale is a third unit, the Multi Service Switch business, which provides non-optical equipment and employs about 300 people.

Ciena, which had been one of Nortel’s smaller rivals in an important market niche, currently employs about 2,100 workers across facilities in Ontario, Georgia, Maryland, California, Washington State and India.