Nortel Networks Corp. or "NNC" (NRTLQ.PK) announced today that it, its principal operating subsidiary Nortel Networks Limited or "NNL" and its other Canadian subsidiaries that filed for creditor protection under the Companies' Creditors Arrangement Act have obtained an order from the Ontario Superior Court of Justice further extending, to April 23, 2010, the stay of proceedings that was previously granted by the Canadian Court. The purpose of the stay of proceedings is to provide stability to the Nortel companies to continue with their divestiture and other restructuring efforts.
Nortel also obtained approvals today from the Canadian Court and the United States Bankruptcy Court for the District of Delaware of the Final Canadian Funding and Settlement Agreement, previously announced on December 23, 2009, which, among other things, provides that Nortel Networks Inc. will 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.
These approvals also allow the creation and allowance of a pre-filing claim in the Canadian creditor protection proceedings against NNL in favour of NNI in the amount of $2.0637 billion. In addition, Nortel obtained various other approvals from the Canadian Court and US Court which, among other things, authorize NNL and NNI to enter into advance pricing agreements with the U.S. and Canadian tax authorities to resolve certain transfer pricing issues, on a retrospective basis, for the taxable years 2001 through 2005.
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