The question of how to divide $7.3 billion raised in the
international bankruptcy of Nortel Networks Corp. was answered
Tuesday by two judges, one in the U.S. and one in Canada.
Justice Frank Newbould of the Ontario Superior Court of Justice
in Toronto and Judge Kevin Gross of the U.S. Bankruptcy Court in
Wilmington, Del. agreed on the outcome: a modified pro rata split
of the money.
"These insolvency proceedings have now lasted over six years at
unimaginable expense and they should if at all possible come to a
final resolution. It is in all of the parties' interests for that
to occur," the Canadian judge wrote.
The decisions grew out of a long-running and pricey trial that
pitted the parent Nortel against its U.S. unit, with each claiming
prime claim on the cash raised by selling off the
telecommunications company's businesses and patents.
British pensioners and other European creditors also vied for a
share of the money, arguing it was unfair for distressed debt
speculators to reap big profits while retirees and disabled workers
took cuts to their incomes.
Nortel filed for bankruptcy in 2009, and sold off its businesses
and patents. The fight over the money has taken years and absorbed
hundreds of millions of dollars.
Write to Peg Brickley at peg.brickley@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires