Nortel Networks Corp. (NRTLQ.OB) said the company, Nortel Networks Limited, Nortel Networks Inc., and certain of its other Canadian and U.S. subsidiaries that have filed for creditor protection in Canada or the U.S., have entered into a Final Canadian Funding and Settlement Agreement. The Agreement provides, among other things, for the settlement of certain inter-company claims, including in respect of amounts determined to be owed by NNL to NNI under Nortel's transfer pricing arrangements for the years 2001 through 2005.
As part of the settlement, NNL has agreed to the establishment of a pre-filing claim in favour of NNI in the Canadian creditor protection proceedings in the net amount of approximately US$2.063 billion, which claim would not be subject to any offset. The agreement also provides that NNI would pay to NNL approximately US$190 million over the course of 2010, which amount includes the contribution of NNI and certain U.S. affiliates towards certain estimated costs to be incurred by NNL on their behalf for the duration of the creditor protection proceedings. The Agreement also provides for the allocation of certain other anticipated costs to be incurred by the parties, including those relating to the divestiture of Nortel's various businesses.
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