Legal Fees Mounting for Ex-Nortel Execs

By Mark Evans | Published: November 28, 2007

Frank Dunn
At the end of the day, ex-Nortel CEO Frank Dunn and the other executives who allegedly cooked the books to trigger a lucrative bonus scheme may very well be exonerated. The entire accounting mess may, in fact, be – as Dunn contends – a result of mistakes and errors rather than a case of greed and avarice, but it could take years in court for everything to resolve itself.

In the meantime, the ex-Nortel executives involved in the lawsuits are having to cough up some serious dough-re-me to defend themselves. According to the Globe & Mail, Nortel cut off Dunn and ex-CFO Doug Beatty from directors and insurance policies after they were fired in early-2004. Without the D&O, they’ve been forced to pay hundreds of thousands of dollars in legal fees to defend themselves.

Given Dunn was building a multi-million dollar home a few ago in suburban Toronto at one time, he can probably afford it.

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  • Former Employee

    No doubt … Dunn & all DID cook the books. The internal paper/email trail is astonishing … hold on.

  • http://deleted Nortel Watcher

    This will be interesting to watch. If any of these individuals gets cleared, Nortel will be on the hook for HUGE HUGE damages lawsuits (sell now). If Nortel had been able to post corrected financials within a reasonable time, I might have bought in to the conspiracy theory. But given that it took Bill Owens and MZ hundreds of millions of dollars and years to post results that they were happy with, I tend to think that the financial tools were more at fault than the operators. Charging these guys for inaccurate reporting is kind of like charging an airline pilot for a bad landing when the only nav tool he had was a sextant.

  • Observer

    The immediate cash bonuses they approved and received than the traditional stock options is a dead give away. Bonuses are the most common motive this type of corporate crime too.

    Of course he will say it was a mistake and he saved the day than being the villain who lied to steal.

    If he admits Roth envy, he might be risking a quarter century all exclusive stay in a U.S. crowbar motel like Skilling and Ebbers. They cried no flies on them too. The criminal authorities will be listening to this civil suit I would imagine.

    The magnitude of damage was a disaster to the company and markets due to these false formal financial statements resulting in one of the largest fraud settlements. To claim he saved Nortel that shrunk from a multiple of its size while NT’s peers turned around long ago, and they have not seen a red cent since strikes me as lame an argument as trying to dismiss charges on jurisdictional grounds. =) What does performance and the license to steal have to do with each other? (no pun intended for NT’s current pay practices)

    The billions and billions in revisions following the restated restatement of a restatement just seems too large an amount for mere error. Did these typos catalyze, is that what he is saying?

    If he wins, can he sue for wrongful dismissal too or did Nortel cover themselves with the ambiguous term “for cause” that took them hours to invent?

    But hey, ya, anything is possible I guess, however unless he hires Mircosoft’s, Mulroney’s, and OJ’s lawyers all at once, I don’t hold much hope in the odds here. =)

    Law is pretty binary than grey in a case like this I would imagine.

    Has anyone come forward with more details than mere reserve manipulation for bonuses theories. Why didnt they get the Dept of Justice’s lawyers in there than the police if they were so serious about solving this crime anyways, they know what to ask and look for better.

    With the watchdogs blessings contrary in who they are to protect, perhaps he doesn’t need a dream team of lawyers =) Perhaps he too will plead like Nortel on jurisdictional matters, or that his guilt would not minimize further damage holding the customers, employees, shareholders, markets, etc., hostage. Could they strike another deal with the devil?

    My goodness this saga is fascinating and beyond belief. Exonerated? I don’t know whether uncontrollable laughter or crying is in order!

  • Former Employee

    The analogy is incorrect: The Nortel exec pilots intentionally executed a bad landing…
    The revenue was purposefully booked, absent GAAP. The ‘cookie jar’ was funded & released, absent GAAP. To-date, the core revenue system/tool has not been replaced.

  • http://personalinjurylawyertexas.blogspot.com/ personal injury lawyer austin

    I noticed that Nortel faced a lot of lawsuits.. how come it happen over and over again?..

  • http://personalinjurylawyertexas.blogspot.com/ personal injury lawyer austin

    I noticed that Nortel faced a lot of lawsuits.. how come it happen over and over again?..

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