More Time, Please!

By Mark Evans | Published: February 5, 2009

According to Canadian Press, Nortel wants another three months to deal with its restructuring process.

The company now wants the the court to extend the stay period until May 1 because it is “necessary to provide stability to Nortel’s business while the company works to prepare a restructuring plan to see it emerge as a more focused and competitive company.”

One question: why the need for the extension given Nortel appeared to have spent a lot of time planning for the bankruptcy filing before it actually pulled the trigger on Jan. 14?

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  • scalpcutter

    It should depend what business you are in.
    It should depend what job you are doing RIGHT NOW.
    Hopefully for employees still there and the business itself it will not depend how far you have your nosed shoved up a managers
    nether regions or if you told him he had a great bicycle helmet.
    It should be and probably will be a bloody slaughter.
    Pretty well simple as that.
    Nortel execs and management have a mandate to keep their hands off people who continue to make money for the company.
    People doing new developments or attempting to innovate at this juncture or persons working on projects that have not got off the ground or are not yet money making projects and may never be, will be the first to go. It's all about show me the money and what are you doing for me NOW, rather than what you may have done for me or what you may do for me in the future.
    Pretty well the only sensible, economical, logical, fiscal monetary proper way to approach it. Now that you have the courts and creditors watching each and every move they are most interested in results, current revenue generators and people who put their nose to the grindstone and get results. They are looking what can be carried out of the ashes now, not later. That seems to be the most proper and efficient way to assess things. If things were not under the microscope I am sure the Nortel concensus would be messed up as per usual. Doesn't matter how you now get those results either. So long as they contribute to the bottom line which today is comprised of survival, sustaining, damage control and optimizing any type of cash flow they currently have in any LOB. I don't think they can simply look at how particular Lines of Business did in a particular Quarter with respect to revenue being the predicator. They have a number of things to assess and God only knows if these clowns can ever make the right decisions. The only possible saving grace as mentioned is the microscope that all suggestions are put under and how the creditors and banks do their own evaluations and assessments?
    Contrary to what some people post here I honestly don't see how liquidation is the answer right now.
    Nothing can be sold for the price you want in this environment.
    That includes real estates, Lines of Business, Hardware, Software and our most important Asset. Team Nortel.
    So let it be Written.
    So let it be Done.
    Can I get a private plane?

  • protosphere

    Restructured, their creditors will not disappear but must be appeased at a lower settled value to keep operating under a viable plan as a smaller company, at best . Otherwise, the Nortel brand will disappear and their doors slammed shut under chapter 7 liquidation, which I anticipate.

    I can not see them emerging restructured with their growing debts /liabilities /legal costs /etc., mounting vs. their declining cash/business /credibility /outlook/etc., even smaller, losing money for a decade in their linear death spiral, and now looking to extending a plan they could produce to date directionless, let alone now under so much financial pressure. Endless insurmountable woes only getting worse than better as they dupe yet again to stall for the proverbial plan, directionless, and endlessly seeking this like the Germanic holy grail. They can not rewrite history as much as they would like to.

    A plan they seek to extend formulating as creditors become increasingly antsy strikes me as just another Nortel punchline.

    Too many creditors and not enough cash and outlook is the bottom line here. Doing the math, it does not strike me as feasible even holding creditors hostage like they pulled with their shareholders in take this or nothing.

    How will they accept gambling on a smaller company even with reduced liabilities enough to satisfy their creditors as an aggregate.

    They must appease the largest and first in line I would imagine, like bondholders providing them with a stake in the newly issued shares of the smaller company in gamble vs. what they would get after they extend burning more money for another how many months under the bankruptcy judge's supervision.

    So there may be a method to these masters of deceit's madness but I do not think this will appease anyone being held hostage to being forced to gamble on them yet again even smaller with reduced liabilities in what would equate to extending their linear death spiral.

    Something or nothing when all is gone depleting resources to wind down run away operations? I do not think so. Their time has come, regardless of how much legal power they can muster, it has come down to a matter of physics. Or an equation ti the limit of zero in their attempts like the stock price already losing almost 100% of its value, and more to come restructured or not.

  • protosphere

    Or, stall a plan to burn even more money so there is less available as incentive to hold creditors hostage restructured smaller in their death spiral =)

    Does this sound like something Nortel would pull? Nah, what was I thinking of of these pinnacles of of endless credibility and transparency =)

  • protosphere

    Yes. This seems to have some striking precedents in able for it to have been repeatedly tried as an argument..

    Nortel tried to dismiss a case in what amounted to the largest fraud settlement in their country.

    Ex-CEO Bill Dunn also tried to pull the excact same stunt too to no avail as the SEC civil trials must go on.

    I noticed that following Enron's civil trials, the Dept of Justice hammered out quarter century sentences they seek pardon but I am unsure if the RCMP criminal charges can influence further DOJ charges on any jurisdictional grounds /double jeopardy or something…

    Must have proven strong arguments for precedent in the past but Nortel trades shares, employs, and does business in the U.S. so maybe this had something to do with it too.

  • FlyOnWall

    Actually, no, I am a customer that has been through the labs for demos and noticed this firsthand. I do not even work for Nortel but given your response, I can understand why Nortel let you go.

  • less

    IF they ever manage to overcome their OCPD tics:

    -preoccupied with details, rules, lists, order, organization, or schedules to the extent that the major point of the activity is lost

    -reluctant to delegate tasks or to work with others unless they submit to exactly his or her way of doing things

    -shows rigidity and stubbornness

    Thing is Mike's goal was never to grow Nortel smaller – quite the opposite.

    He's pi$$ed away most of Nortel's cash fueling his tic that telecoms need to come around to doing things the internally beancounting Nortel way.

    No irony there, eh.

    I do see a smaller, specialized Nortel successful – if unhappy – in its micromanaged straightjacket.

  • less

    You, uh, happen to wear any ESD protection on your lab tours? Cuz if not, you were a huge part of Nortel's problems.

    Now that he has his customers on their backs with legs akimbo and in the stirrups, rest assured that Joel Hackney ain't gonna have no more dilletantes swaggering thru his labs casually spot-welding expensive circuit boards into reclamation with a careless touch of a finger just because they're payin' for his jet.

    Joel's fingers are clenched into an iron fist.

  • FlyOnWall

    You, uh, make sense. No wonder you were canned.

  • less

    This is what I envisioned when I suggested NT employess – Believers and Godless Cynical for-Profit Infidels Secretly Owning Cisco Stock alike – flashmob the executive suites instead of holding limpid candlelit vigils in the lobby:

    http://www.cnn.com/2009/WORLD/europe/02/09/uk.s…

    Thousands of dancers jammed a major London train station in a Facebook-driven “flashmob” mimicking an advertisement for a phone company.

    The sheer scale of the event came as a complete surprise to the organizer, a 22-year-old Facebook user who identified himself only as Crazzy Eve.

    “There were a lot of bemused commuters wandering around the edges, trying to get to their trains but nobody seemed to mind too much. Everyone seemed pretty good humored,” he said. “I think a lot of people who pass through Liverpool Street regularly are getting used to this sort of thing.”

    “In the process we bring excitement to otherwise unexciting locales and give strangers a story they can tell for the rest of their lives. We're out to prove that a prank doesn't have to involve humiliation or embarrassment; it can simply be about making someone laugh, smile, or stop to notice the world around them.”

    Buncha folks all standing silently in llne, there, with numbers and resume folders in their hands…. and at the end of the session their phones chime

    “We're sorry, but you do not meet our current financial needs. Please hang up and work harder”

    I'll bet the NT brass, too, would be somewhat bemused, but ultimately get used to the sheep in their halls pretty quick.

  • less

    Nortel… Fact, fiction and impact

    An analyst from Fox Group separates fact from
    fiction around Nortel's decision to seek creditor protection

    http://www.itbusiness.ca/it/client/en/home/News…

    What is the process?

    There are a few basic steps in the reorganization. First is the pre-filing, which involves a substantial amount of work to prepare the ground work for the filing process.

    After the filing, there is a process of stabilization which allows daily business process to carry on, while negations begin with the affected parties. From this process, a plan of reorganization is developed which allows the company to move forward with a more permanent reorganized company.

    Finally, the company will exit the creditor protection stage. Without committing to any timeline, Hackney indicated that this process could take up to 36 months.

    The other issue recently discussed is the pension deficit. It is has been estimated by analysts that the deficit could be between $2.5 billion and $2.8 billion. Numbers of this magnitude make headlines, but it's important to review the underlying actuarial assumptions and the approach that companies take to resolve pension deficits.

    Normally, companies have a number of years to correct these shortfalls and a deficit of this size could require an annual contribution in the order of 500 million dollars.

    Thats right, recovery would be measured in years, not months.

  • drinking_the_koolaid

    First of all if you are a customer you have no feaking clue what it is like to be inside Nortel. Second what do you notice first hand when you went thru the labs? Are you suggesting that Nortel's issues are to be blamed on the peons/programmers instead of the chiefs?

  • drinking_the_koolaid

    First of all if you are a customer you have no feaking clue what it is like to be inside Nortel. Second what do you notice first hand when you went thru the labs? Are you suggesting that Nortel's issues are to be blamed on the peons/programmers instead of the chiefs?

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