Nortel's Multinational Mediation Underway
Thursday, April, 26, 2012
Nortel's mediation case wears on, beginning talks on Tuesday of how to distribute the nearly $9 billion in assets the company has accrued. It is being called one of the most complex mediation proceedings of its kind and efforts to settle many of the debts both in the US and in Canada are being noted by the Ontario judge as being rife with “pitfalls of failure.”
If this case does go to litigation, Chief Justice Warren Winkler says that it will likely drain the funding that could go to the creditors. Those on the list do include pensioners from this once prestigious tech company. Winkler is quoted as saying, "The alternative to a mediation outcome is a lengthy litigation process. This would be a catastrophic outcome for some, and unsatisfactory for most of those affected by this case."
Multinational Mediation Services
The company's bankruptcy proceedings involve companies and others in 20 countries. In fact, every continent save for Antarctica are represented. Disabled former employees, trade creditors, bond holders and even governments are all looking for their share of the $9 billion. Thus far, the mediation steps have been taken in the UK, the US and in Canada.
Winkler stated that, "The Nortel insolvency is one of the most complex trans-national legal proceedings in history. The complexity of this case would make even a conflict-of-laws professor cringe." Unfortunately, though the numbers are high, the residual assets do not meet up to the value of the claims listed thus far.
Issues For Nortel Execs aside from Civil Mediation
Civil woes are not the only issue that some parties from the company are facing. Former CEO Frank Dunn, ex-controller Michael Gollogly and former CFO Douglas Beatty have pleaded “not guilty” to charges that were leveled relating to them allegedly manipulating the company books and defrauding around $12.8 million from bonus payments. The three are currently on trial in Toronto for fraud allegations.