The sad saga of Nortel Networks is coming to an end.
A former telecommunications giant that once employed more than 8,000 people alone in the Research Triangle and 95,000 people around the world says it has wrapped up the sale of all its business units and patents as part of its liquidation through bankruptcy.
In an update filed with regulators on Thursday, Nortel said the sales have produced $7.8 billion.
The company recently received court approval to proceed with bankruptcy matters through Oct. 31. In its latest filing, Nortel said it plans no further quarterly financial reports after the third quarter, the Canadian Press reported.
Nortel filed for bankruptcy in 2009.
Last week, Nortel sought bankruptcy court approval in New Jersey to terminate payment of health benefits to its retired U.S. workers.
However, creditors continue to fight for their share of Nortel assets – including European affiliates.
Also this week, Nortel proposed a schedule where the bankruptcy judge in Delaware could hold a hearing in March and dismiss about $2.45 billion in claims filed by U.K. affiliates.
The proposal, for presentation to the bankruptcy court at an Aug. 22 hearing, is an upshot from a 62-page opinion in March by U.S. Bankruptcy Judge Kevin Gross who concluded that Nortel was entitled to dismissal of 30 claims for breach of fiduciary duty out of 85 claims filed by foreign affiliates.
Nortel was unsuccessful at having the judge throw out every claim filed by the company’s European affiliates. Ultimate resolution of the remaining claims will determine how $9 billion cash will be distributed.
Nortel is proposing that Gross allow fact investigations at this time only with regard to so-called fiduciary duty-dependent claims and tracing-dependent claims. If Gross adopts Nortel’s proposal, the judge could be holding a hearing in March 2013 on a so-called summary judgment motion where the company would argue that most of the remaining claims can be knocked out without a trial.
Nortel contends that the litigation schedule advocated by the foreign affiliates wouldn’t have factual investigations ending until August 2013.
The company wants discovery halted on other claims by the affiliates. For a discussion of Gross’s opinion in March, click here for the March 21 Bloomberg bankruptcy report.
European affiliates with claims at issue are Nortel Networks U.K. Ltd., Nortel Networks SA, and Nortel (Ireland) Ltd. Nortel Networks U.K. owns all except three of the 19 European affiliates.
In addition to sorting out the intercompany claims, there also must be agreement or court decisions to devise a formula dividing sale proceeds among the Nortel companies in the U.S., Canada, and abroad.
From liquidating assets, Nortel collected almost $9 billion for distribution to creditors. From the total, $4.5 billion came from the sale of 6,000 patents to a group including Apple Inc., Microsoft Corp., Sony Corp., Research In Motion Ltd., Ericsson AB and EMC Corp.
The Nortel companies filed for bankruptcy reorganization in January 2009 in the U.S., Canada and London. They reported $11.6 billion in consolidated assets against debt totaling $11.8 billion as of Sept. 30 2008.
The case is In re Nortel Networks Inc., 09-10138, and the parent’s Chapter 15 case is In re Nortel Networks Corp., 09- 10164, both in U.S. Bankruptcy Court, District of Delaware (Wilmington).
(Bloomberg news contributed to this report.)
[NORTEL ARCHIVE: Check out a decade of Nortel stories as reported in WRAL Tech Wire.]