Nortel Gets $17.65-Million for Alteon Sale

By Mark Evans | Published: February 22, 2009

Alteon
So, Alteon pulled in a cool $17.65-million for selling some of Alteon’s technology to Radware – a far cry from the speculated $30-million to $50-million.

Nortel told a bankruptcy court that the value of Alteon had fallen, and could decline even further, which is bad news for the potential sale of other Nortel assets in the campaign to raise cash at the insolvent company.

The company said it put Alteon on the block last September, and got two offers, including a near-deal with one purchaser. With the bankruptcy protection filing last month, Nortel said it had to reopen the process and seek bids from 30 potential buyers. (Note: Nortel paid $7.8-billion for Alteon at the height of the telecom boom in 2000.)

Source: Ottawa Citizen

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  • The psychiatrist

    At this stage all is lost,but I do hold out hope that the execs past and present realize that as a result from this pathetic unraveling of Nortel,it was and has been the equivalent of chimpanzees fighting for bananas.

    The question is -do they have the ability to carry any sense of shame from it?

    Unfortunately I'm not convinced-has anyone ever observed chimpanzee behavior?

  • Still_waiting

    From the Source Noted
    ” Joel Hacking, the head of Nortel enterprise operations, ” Maybe a Freudian slip on the part of the author of the article ?

  • betoX

    it is only 442 times less than originally paid…

  • protosphere

    If Radman is outbid, deduct a cool million off the new price stalking this crazy horse to get out of the deal.

    Hack's communication skills in magnifying ambiguities to hide the fact they are selling anything not nailed down are unrivaled. No wonder Mikey delegates questions to his promoted pal. Hack said, “as part of our efforts to streamline investments around our future direction to speed and simplify business communications.” Does this sound intelligent to you? I would have said strategically reallocating resources with the objective of … than simplifying anything becoming increasingly more complex.

    As for getting $17 million they paid $6 billion for 9 years ago, albeit at a lower decline than their shares. this covers only how many days of costs as they wind down operations.

    The best news might be for the few employees going to Radman and leaving Nortel , albeit even Radman didn't see money in 2008 either.

    As I speculated, this buy was to extend global reach and Radman later confirmed. However, Cisco and F5 dominate this arena and F5 is already making provisions to transition Nortel customers.

    Perhaps the price is right at almost half the speculated price, who knows how much a greater reach this added product line will do for Radman. I feel renaming the brand they are buying is a excellent idea though.

    Lastly and perhaps most importantly, note that all of their units are increasingly losing value post bankruptcy as we also indicated / speculated early on. Any future bids on Alteon may be a reflection of any demand for their remaining larger units, like the one they failed to sell earlier (MENs) that might have assisted in at least paying employee severances.

    I think it would be best to sell what they can first to see what is left and then formulate any plan. Not that I believe there will ever be a viable plan even if they exhaust cash to hold creditor's hostage. I guess time will tell by history has no been their friend if this is any indication.

    Again, $17 million is peanuts relative to the billions in shortcomings as they ground their corporate jet and recycle coffee cups =) Perhaps this will assist their reneging their options gamble after the bed is laid to cash, already plagued by an options to cash history, or assist paying their new $100M lawsuit insurance premiums.

    $17M certainly isn't anywhere near enough to cover employee severances. A multiple of this entire amount wouldn't even cover the loss of what some of their shareholders lost. Heck Lotto 649 yesterday was a multiple of this. Maybe Nortel should start buying Lottery tickets and reassess their odds to what Joel claims instead =)

  • s1ckpuppy

    No wonder Wal-Mart did not go with Nortel's enterprise solutions, a few years ago. They saw the writing on the wall, as where Nortel was headed. Besides, the failure to sell anything of significance at walmart was hampered by the worthless, lieing, 2 faced, backstabing, so called walmart engineers. And the mole that had placed within Nortel. Corporate Espinoage is alive and well at Walmart. The most unethical company that has ever exisisted!! Wal-Mart, you get lied to, so they can live better!!

  • broadbandbill

    Fire sales until the bitter end…–bb

  • horace_grimswold

    That's less than half of last Saturday's Lotto 6/49 jackpot.

  • scalpcutter

    It is the perfect sum.
    A pittance that the creditors don't want and the lawyers will get all this money when the creditors watch this go through the courts.
    Exactly what Nortel Wanted.
    Expect more of the same for technologies they don't want anymore.

  • joedoe1

    in how many internal emails and GIS did he promise not to sell assets in fire sales- how many more lies to come???????????

  • scalpcutter

    He said that before bankruptcy filing.
    He has not said that since.

  • forgive

    17M is big deal for NT now. Take whatever offer into pocket which will save lots of jobs here..

    When does NT furniture auction or liquidation sale start? I missed last round of sale in 2001. I didn't have chance to know the purchase price of Nortel office chair, until recently one guy told me, Many chairs(you should know how it looks like) were bought at $800-$1000 each in John Roth's years.

    Nortel products may not be attrative to buyers now. But office furniture is different story. If anyone knows such event, please post here. Nortel office furniture is a best buy!

  • forgive

    If I were Zero Man, I will put my chair (bought at $20,000.00) on the Ebay for sale to collect some real money and pay the severance money to laid off employees.

  • NortelTragedy

    A simple z-score calculation at any point over the last five years (maybe more) would have indicated bankruptcy, and that's a fact.

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Caught that too, couldn't have been a more fitting “slip”…

  • http://nortelinsider.wordpress.com/ Desk Jockey

    Recently a distraught employee requested severance and this was management's response:
    http://www.youtube.com/watch?v=y-QR4vpTPzI

  • joremero

    so … in a liquidation, how is IP handled? I heard it can get messy, and I believe Nortel should still have a fair amount of useful IP.

  • fatzoff

    Great

  • broadbandbill

    You mean IPr (intellectual property as opposed to IP-Internet Protocol). Regarding IPr, Nortel has nothing left other than greedy management that will sell anything for a buck (note: they only got fifty cents for selling their souls to Lucifer); figures…–bb

  • broadbandbill

    Yet another brilliant display of that world-famous Nortel ingenuity; to bad they are paired up with Nortel management’s lack of the same…–bb

  • broadbandbill

    $17M will NOT save any jobs but will ensure Z and his GEngsters get paid…–bb

  • broadbandbill

    If I were Zero Man I would go back to Macedonia for a refresher course of what it is like to be a Man! He obviously forgot…–bb

  • CrazyCanuk

    All of the IPr was handed over to the Elbonians years ago. “Nothing to see here folks, move along”

  • Still_With_Nortel

    Anyone has any news on what is happening on the Carrier front, especially with the GSM line of businees.

  • CrazyCanuk

    Best case scenario… $17M buys another two weeks payroll for those poor schmucks like me who still work there.

    Worst case scenario… $17M more to be vacuumed up by Mike and the BoD.

  • CrazyCanuk

    Just like that old joke about laywers..

    How can you tell if MikeZ is lying…
    …his lips are moving.

  • broadbandbill

    …and the Oscar (along with the $17M) for the worst performing CEO goes to…–bb

  • Ex_Nortel

    Nortel's intellectual property rights (patents, etc.) assigned to a particular product set go along with that product set in any '363' asset sale. In addition, Nortel may chose to sell IPr out of its 'portfolio' as a '363' asset sale.

    There are numerous IPr 'vulture' firms that specialize in sweeping through IPr portfolios and buy patents, etc. as distressed assets. I am sure that MIke Z and his team of GEniuses will be selling off patents so that they can continue to get paychecks as key employees. But not one dime of these sales will end in the pockets of laid off employees as severance restitution.

  • Singapore1

    Why would you even bother to sell this at such a pathetic price.

  • CrazyCanuk

    These days, I find myself unable to decide whether to attribute the performance to incompetence, or malicious intent…

  • Moose_Chaser

    Huh ?

    $17.65 million ? That's it ?!!!

    Very, very sad.

  • 1derY

    At least that employee has a chance to plead his case to the Z man…I doubt that Z has ever seen or read any letter/video directed to him…He's still too busy with his 5-year plan.

    Z is slated to visit the campuses this week…I hope some of the folks will bring the questions directly to him then..however I dont think the voices will be heard ..his “I believer” probably will show up early to occupy all the seats and chant down all the discontents.

    I hope the folks ask the questions:

    “Can you do a self-criticism on your performance comrade Mike ?”
    “When do you step down ..Why and why not ?”

  • 1derY

    You meant the Razzie goes to …..

  • Hotwheeler1

    If I were Zero man I would say …”I ain't a Slumdog Milliionaire”

  • less

    47.104.0.0 has a lot of unused IPs.

  • less

    Nortel's Bollywood remake of “Up In Smoke” (filmed on location in China)

  • less

    They did it for The People; leveraging synergies forward is a customer-faced paradigm. Someday The People will understand.

  • broadbandbill

    Less–You are just getting funnier and funnier…–bb

  • broadbandbill

    Even though it was those very employees that created the IPr in the first place. Thieves, nothing but cheap, shameless thieves…–bb

  • broadbandbill

    Why don't YOU ask him those very questions; don't wait for others courage, use yours…–bb

  • broadbandbill

    And the Oscar for the worst performing management team of the past year goes to (envelope please): Nortel’s Slumdog millionaires. Unfortunately, the folks behind the debacle could not be here, they are on location trying to add more millions for themselves. Mr. Joel Hackney was going to be accepting the award on their behalf but he got delayed due to run-in with Rhianna in the parking lot…–bb

  • Anonymous

    I understand that many people hate Nortel executives, but this fabricated nonsense is really starting to get stupid.

  • HeadsZWinsTailsYouLose

    Well, based on docket 294 I doubt NT will see a penny of that money. $15M goes straight to Lazar investment bank upon completion of such a transaction, and I quote:

    “A fee of $15M payable upon the consummation or material completion of a Restructuring or a breakup of the Company pursuant to insolvency or bankruptcy proceedings”

    Jefferies also has dibs on that money. Too bad so sad for all the people who thought it may help NT.

  • felixmk

    Bwahaha!!! When you run out of Downfall video, you could try using “Mary Poppins” for their new strategy.

  • TongueInCheek

    Well that's certainly a stretch. Selling off a small business unit can hardly be seen as a Restructuring or Breakup of the company given that neither a Business Plan or Restructuring Plan has been filed or accepted by the courts.

  • HeadsZWinsTailsYouLose

    TIC…that was good! One card hardly detect the sarcastic undertones of your post.

  • less

    “Hole Jacking” – thats just so incredibly rude.

  • less

    MC Hole-A took her “Disturbia” lyrics personal-like:

    http://www.elyrics.net/read/r/rihanna-lyrics/di…

    No more gas in the red, can't even get it started
    Nothin heard, nothin said can't even speak about it
    Ain't gonna play nice, watch out you might just go under
    Disconnected on call, the phone won't even ring

  • joedoe1

    okay, but ZeroMan and his spokesman also said there wont be a bankruptcy filing happening, so where is the point? Crazycanuk just said it!

  • joremero

    shouldn't NY bank of Melon be always the first one in line? They are owed the most… by far

  • Casual_Observer

    LOL..Nortel represents the global economy, stock market and every sector all wrapped in one giant ball of wax…insolvent and still trying to stay alive. Anyone notice Cisco raised money thru a debt offering even though they supposedly have $30B in the bank ? Nortel checks should soon stop cashing all together soon.

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