It's not all bad when we talk about Nortel!
Last Ottawa Citizen article explains that.
So many good people were grown on Nortel's payroll!
So many!
Shareholders would be proud knowing that!
So many!

The court is ultimately responsible to ensure the law (Canadian, US, UK in this case) is followed and that the rights/interests of all parties are recognized and protected. The Monitor is assigned to be part of the process as it moves forward.

Unlike many other cases (where there is significant misalignment of assets and liabilities), on paper, Nortel is relatively close. The driver was not the differential, it was cash. As they have for all this decade, they continue to burn cash to maintain operations (this is an area where Mike and team were able to drive improvement, with a few quarters postive CF). However, the need to do major restructuring (finally recognized) and the major pension underfund liability (probably closer to $3B than $2B) were pieces of the puzzle that did not have a viable answer outside of going the protection route.

There is still much pain to go for this once big company. I refrain from the expression “great company”, as it rarely has demonstrated consistent and growing profitability since the real hay days – the 1980's. The emotional and financial pain for employees, suppliers and customers who have made financial and personal commitments to Nortel is only beginning. I am not delusion or naive, but the world is also not all dark. Either Nortel goes into bankruptcy (with debtors paid cents on the dollar and a pension fund windup) or it emerges as a smaller more focused (restructured) company with some type of settlement with debtors. In Canada, there are recent examples, such as Air Canada.

While I am no admirer of Mike Z and his few close associates (Joel, Dennis C), they do understand that like the class action suits, if they dont deal with the debt, they can never get to a new world. Personally, I doubt their ability to build a vision, strategy and execute a new direction, but they are right that they cant move forward as it currently exists. The laws and courts provide both the means and the protection to reset. A lot of people (current employees, ex-employees, suppliers, customers) will pay for the sins of omission and commission committed by a long list of previous leadership.

Only time will tell, but I am highly confident (based on my corporate, financial and legal experience) that the debt wont go from $12B to zero.

Have a nice day!

many thanks for the replies.

But when you look at the second monitors reports issued on Jan 30, 2009, you see that the cash has declined around by 70 mn. so you are right, when you take into account unpaid liabilities due to bankruptcy protection, 1Q2009 figure (not 2008 end figure) will not be a pleasant one.

FIRING EMPLOYEES IS MORE COMPLEX!!!! My friend?
Just imagine? 3,200 employees taking them to court for
“UNJUST CAUSE” There has to be justified reasons for just
“FIRING EMPLOYEES”, which is very complicated. If they went on
strike and don't want to go back to work.. then it's probably logical
to fire them all!!

Now? My question is… How do they FIRE an incompetent CEO?

Here's an interesting question – assuming their is a Nortel post the CCAA/Chapt 11, how does everyone feel about having a stake in the “new Nortel”?? Highly likely they will try to turn a lot of the debt into equity in the newco. Will you want to be a stakeholder, given its the same leadership and business?? Joel Hackney as the CEO of a now Enterprise centric “New Nortel”?? Will you have a choice?

Maybe I should buy some more Cisco stock….

It's not all bad when we talk about Nortel!
Last Ottawa Citizen article explains that.
So many good people were grown on Nortel's payroll!
So many!
Shareholders would be proud knowing that!
So many!