Nortel cleared to end bankruptcy, distribute $7 bln to creditors

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By Tom Hals | WILMINGTON, Del.

WILMINGTON, Del. Judges in Delaware and Canada
approved on Tuesday a plan to pay more than $7 billion to
creditors of Nortel Networks, ending years of litigation over
the former telecommunications company that filed for bankruptcy
in 2009.

The rulings by U.S. Bankruptcy Judge Kevin Gross in
Wilmington, Delaware and Frank Newbould of the Superior Court of
Justice in Toronto ends one of the longest and most expensive
Chapter 11 cases, marked by battles over funds raised by the
company’s liquidation.

Newbould said it was unfortunate the “case wasn’t settled
sooner without the added expense and delay caused by the
litigation.”

The two courts were linked by video, as they have been
throughout the proceedings. The coordinated ruling will allow
repayment of vendors, retirees in Canada, government agencies
and investment funds later this year.

Tuesday’s hearing was marked by a brief outburst by Gross
directed at Mark Kenney, a lawyer for the U.S. Trustee, the
government’s bankruptcy watchdog, as Kenney argued against the
plan’s liability releases. Kenney initially refused to cede the
podium and only relented when Gross shouted that he would call
the guards.

Ontario-based Nortel Networks was once among the biggest
makers of telecommunications equipment in the world, with 93,000
employees and a market capitalization of $250 billion at the
height of the 1990s technology bubble.



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