Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – retirees and people drawing other benefits such as long-term disability from the bankrupt company put up quite a fight in U.S. bankruptcy court over potential lost of benefits.

As a result, Nortel has to keep paying some $2 million in benefits for several months, reports the Ottawa Citizen newspaper.

Reporter Bert Hill wrote that the ex-U.S. Nortel workers were “inflamed” by Nortel’s “blunt,” mere 15-day notice to register complaints.

“Nortel had thrown gasoline on the fire in late June by declaring that the benefits must go because the group now provides no benefit to the company but former U.S. pensioners flooded the court with more than 330 pleas in less than three weeks,” Hill reported.

Nortel, which once employed 8,000 people in RTP but has sold off most of its assets through court-supervised liquidation, had wanted to stop paying benefits as of Aug. 31. ()

“The U.S. groups slammed Nortel for treating their Canadian counterparts better,” Hill wrote, noting that Nortel reached a deal with retirees and others north of the border and also paid $50 million to senior management with court approval.

“Pensioners in Texas, North Carolina, West Virginia, Florida and California say they are being double disadvantaged,” Hill added. “Not only could the Canadians get coverage for up to four months longer, but the money will also come from U.S. Nortel operations and reduce their eventual share of claims against U.S. assets.”

The U.S. court has instructed Nortel to “negotiate with the “vulnerable groups before it modifies benefit coverage,” Hill wrote.

For the Ottawa Citizen report,

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