Telecommunications Company Nortel In Mediation Talks
A telecommunications company that is being liquidated in bankruptcy, Nortel Networks Inc has won the court's permission to go into mediation to decide how it will carry out its pension plan. A US Bankruptcy judge, Kevin Gross out of Wilmington, Delaware has granted a 60-day mediation time frame. This will help the telephone equipment maker to negotiate deals with both committees that represent the not only the retirees and those workers receiving disability payments.
Mediation Services Ordered for European Nortel Units
Nortel was ordered last month to go into mediation amongst its European units in a much bigger conflict in terms of how to split several units. The stakes being $7 billion between the US and Canadian units have collected in selling their assets. This list includes over 6,000 patents to a group comprised of both Microsoft Corp and Apple Inc.
Nortel's Civil Mediation Back in the States
The dispute here in the states to resolve the disability payments and pension issues will likely be a much easier one to contend with. This won't likely interfere with the European and US units, and Albert Togut says that, “The likelihood is that this is going to be done before the ‘Queen Mother’ of all mediations.”
So far, Nortel has actually released about $20 million in retiree benefits over the course of the past two years, their attorney told the Judge. Eventually, the company will have to cancel the pension plan and also that program that grants disability payments to former employees.
Lisa G. Beckerman, an attorney for a committee of unsecured creditors said that, “We are going to have the termination of these plans because at some point there won’t be a company.”
The company filed for bankruptcy in 2009 and since, has sold each of its major businesses and is also has plans to divide those proceeds amongst each of their creditors. There is no word yet on the rest of the plan and how the resolution presents itself will impact that a great deal.