A settlement has been reached with one of the international divisions of Nortel Networks over their piece of the former technology giant’s remaining assets.
Lawyers representing Nortel’s defunct operations in Europe, the Middle East and Africa told a judge on Tuesday they’ve come to an agreement with the court-appointed monitor over their share of the US$7.3 billion made from the sale of certain parts of the company.
Details on the terms haven’t been provided to the court, but law firm Lax O’Sullivan Scott Lisus LLP says it will have a signed agreement by Wednesday morning.
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The settlement only resolves a small part of the bigger trial to divide the assets between other parties, including bondholders and Canadian pensioners.
An unprecedented Canada-U.S., cross-border trial began in May aimed at allocating billions of dollars to various creditors, including bondholders and 20,000 Canadian Nortel pensioners who have seen their benefits dramatically reduced since the company filed for bankruptcy in 2009.
Those proceedings wrapped up last month with a decision reserved for later this year, though smaller portions of the Nortel case remain outstanding, including a battle unfolding in a Toronto courtroom this week over claims that the company still owes U.K. pensioners money.
Opening arguments for that part of the case unfolded at a snail’s pace on Tuesday, causing some lawyers to raise concerns that certain witnesses may not be able to accommodate a revised schedule. The testimony is expected to run into next week.
Unlike the main trial, which was simulcast using closed-circuit feeds from Delaware, the U.K. pensioners portion is unfolding mostly in Toronto with some witnesses providing testimony through streaming video feeds.
The Nortel trial is considered one of the biggest bankruptcy cases in Canadian history. The cost of Nortel’s demise has climbed above US$1 billion over the past five years, with legal expenses eating away at money that could be divided among the various parties.
At its height from 1999 to 2000, Nortel was worth nearly $300 billion, employed more than 90,000 people globally and was regarded as one of Canada’s most valuable tech companies.
In 2009, Nortel filed for bankruptcy in North America and Europe. The company was felled by changing market conditions, economic upheaval and an accounting scandal that devastated its stock price.
Since its fall, Nortel has broken up and sold off various parts of its business, including patents and wireless technology, the proceeds of which are now at issue.
