Nortel given thumbs up to pay $7.3bn to creditors
An end to the Nortel Networks bankruptcy saga appears to be on the horizon after the troubled firm won approval to start distributing $7.3 billion to creditors.
Judges in both the US and Canada gave Nortel permission to begin dishing out funds it raised from selling business units and patents after it declared bankruptcy in 2009.
According to Reuters, Judge Frank Newbould, representing the Superior Court of Justice in Toronto, and Judge Kevin Gross, of the US Bankruptcy Court in Delaware, rubber-stamped Nortel’s plan to pay back creditors.
Nortel was once a key Canadian technology vendor with a market capitalisation of around $250 billion, but filed for Chapter 11 protection in its home country and the US, selling off a number of business units after it failed to restructure its assets.
Ciena picked up its Ethernet networking business for $769 million, while Ericsson took on its CDMA and LTE assets for $1.13 billion. The Swedish firm also invested in Nortel’s GSM arm, alongside Kapsch.
Embattled Avaya – a company which itself filed for Chapter 11 protection last week amid reported debts of around $6.3 billion – was also involved, buying Nortel’s enterprise solutions unit.
Newbould said it was unfortunate the "case wasn't settled sooner without the added expense and delay caused by the litigation” according to Reuters.