Canadian telecoms equipment maker Nortel Networks Corp. (NRTLQ.PK), along with its principal direct operating subsidiary Nortel Networks Limited, announced Thursday that the court-appointed mediator has terminated the mediation proceedings without settlement, stating that further discussions were no longer worthwhile.
The talks were in respect of dividing around $9 billion raised from the sale of businesses and patents of Nortel, which went bankrupt in 2009. The mediation involved the company's Canadian, U.S. and European entities and their creditors.
Nortel, which was once the largest telecoms equipment maker in North America, had initiated creditor protection proceedings on January 14, 2009, and decided to wind down operations. Nortel, in its website, noted that it has sold all of its businesses as well as its patents and patent applications generating approximately $7.7 billion in net proceeds. Meanwhile, the company is facing huge claims against its remaining estates, including from retirees in Canada and the UK, who have been fighting for a larger portion of the cash against the company's U.S. bondholders.
In its latest statement, Nortel noted that, as announced earlier, the courts overseeing the creditor protection proceedings in Canada and the United States directed the Nortel entities to participate in a joint mediation and appointed Warren Winkler, Chief Justice of Ontario, as the sole mediator for the mediation.
The mediator now announced his decision to terminate the mediation based on his conclusion that further efforts at mediation are no longer worthwhile. The decision followed an all-party mediation session, which began on January 14 and ended on January 22, without any agreement having been reached on the matters in dispute.
"In light of the unsuccessful conclusion of this mediation process, which follows two previous failed attempts at achieving a mediated solution, both the process for and timing of the ultimate resolution of allocation and inter-company claims matters remains uncertain and further delays in the resolution of these matters potentially could be significant. Such delays would result in a corresponding significant delay in the timing of distributions to holders of validated claims of the various estates," the company said in its statement.
In the U.S. pink sheets, Nortel shares closed Thursday's trading at $0.0055, down $0.0005 or 8.33 percent.
by RTT Staff Writer
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