Eight years ago, Nortel Networks Inc. and many affiliates filed
multiple insolvency proceedings, across Europe, the US, and Canada.
At the outset, the debtors expected creditor recoveries would be
But then Nortel auctioned off its intellectual property
portfolio and business lines, raising US$7.3 billion and the
parties negotiated how to divide the money among the different
estates. But a consensual agreement wasn't reached. A key
aspect was the intervention of the UK pension schemes which claimed
to be entitled to proceeds from Nortel entities which were not
In 2014, the courts in the US and Canada held a joint,
video-linked trial to determine how to allocate the funds. The
Joint Administrators for the EMEA entities and UK Pension Trustee
Limited and the Board of the UK Pension Protection Fund
US Bankruptcy Judge Kevin Gross in Delaware, and Ontario
Superior Court Justice Frank Newbould issued separate decisions
that reached similar results – that the proceeds should be
divided among the estates based on a modified pro rata
Following appeals and cross-appeals, multiple mediations
finally resulted in a global settlement in summer 2016.
Mr Justice Richard Snowden in the High Court in London approved
the settlement in November 2016. In the US and Canada, there will
be similar hearings and if approved distributions to creditors will
finally be made in 2017.
"These have been complex, challenging cross-border cases,
and it will be good if creditors can finally start receiving
distributions next year," said Daniel A. Lowenthal, a partner
at Patterson Belknap Webb & Tyler LLP in New York, who
represents Law Debenture Trust Company New York, an indenture
trustee in the case.
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