Nortel Expects to Complete Reorg by May

reorg, z-org, disgorg. like, whatever.

I think that it is true that HSBC went Cisco. I know they lost a 1700 unit deal for the branches. Could just be that HSBC needs to raise $18 billion just to stay properly capitalized.

I thought this was interesting... From the Facebook page "I Believe" who knows how true it is;

http://www.facebook.com/topic.php?uid=42820712269&topic=6644

could be. its 40% of sales so 2.7 billion sounds kind of right. would think the offer should be lower given the overhead, market conditions, customer churn which would affect revenues. I'd put my money on 2 billion.

is alcatel going to follow. they are quite bloated.

does anyone know how much the long carrier division is worth? i heared they are being offered 2.7 billion? does nortel even have ANY division worth that much?

You guys need to check what's going on with GE now.

GE is going bust. $5 a share. could be bought out or bankrupt. well if they get their dream team from nortel, their going out of business plan can be accelerated.

I have to say I am absolutely gutted that I may well lose my job in this round. I'm a high performer and have been ever since I joined, and I have good skills & experience. But that doesn't seem to account for anything. Or the fact that I have been so loyal despite everything. I know there are many others out there in NT like me. Doesn't seem fair does it.

i heard they are getting offers on the long carrier division as we speak.

A letter to the troops

Dear Employees

As you all know we have hit the iceberg and we a quickly taking in water. Thank you crew for your best efforts and continue to work at bailing the water out. I have instructed Pavi to go to the kitchen and dump out all the cole slaw so has to use the big white buckets for additional bailing. I shall remain on deck and make sure all the "key" crew are ready to board a lifeboat that has been put aside for them. The waters are choppy and storms are forcasted. The SS CISCO and the SS JUNIPER, have declined all our repeated SOS and appear on the horizon ready to assist once I have issued the command to abandon ship. Thank you once again and I have appreciated all your efforts during this crucial time. Now I shall bid you all farewell and it will be every man for themselves going forward.

Mike Z

That was the old email. The latest one is

Dear Employees,

As you know we hit an iceberg and were quickly taking in water. This is a difficult time, the most challenging period of my career as captain. We will patch up the hole and come out of this with a stronger and better SS NORTEL. I require all of you to be focused on ensuring the leakage is stopped so we can start cruising at top speed again. All employees need to get down to engineering into the boiler rooms, propulsion, stern to get this done and continue working harder. The Own It! and I Believe! teams are in place to support resolving issues on hand.

The crew, first officer and myself will be on deck to ensure we are on course. There is a lot of interest to help us out but until then I need all of us focused.

Z

Attn: Crew members: close the hatches once engineering gets to it.

Just exactly what is the "process" Mr.Z is refering to?

Is it about the CCAA? The Company's Creditors Arrangement Acts, and
about Chapter 11?

That... comes after May 1, 2009... the company would come up with the legal
Arrangement Process to pay up their Creditors?

The impending loosers of this fiasco are the RETIREES and PENSIONERS!!!!
also to say the least were former employees severed or laid-off !!!

Hi,

I am Joel's new lapdog and used to be someone elses lapdog but today I officially take on new responsibilities for Joel. Which is pretty interesting I can run technology solutions with my arts degree. You folks should be proud we are just about to turn the corner with our BIZ transformation.

Oh wait that was a bit of a lofty ambition. Anyways......some of my good friends are interviewing ex NT people and she likes to joke how there are great claims of accomplishment until asked specifically what they did to contribute. They are reminded of office space" I am a people person".

I better get back to my kibble.....

Got sick and tired of reading the docket filings... For a change, I read a book that is highly recommended among leaders that know how to lead.. The book was "Do the Right Thing: How Dedicated Employees Create Loyal Customers And Large Profits" by James F. Parker, former CEO of Southwest Airlines.

Time frame - immediately after 9/11 when virtually every other airline in the country was getting ready to announce massive cuts/layoffs/service reductions... Key excerpt below from page 22:

At Southwest, we made a different decision. With the full support of our board of directors and the leadership of the chairman of our board, Herb Kelleher, we decided that Southwest would not lay off employees. We would not ground any of our airplanes. We would not cut pay of our employees. And we would pay the $179.8 million to our employees' profit-sharing plan on time, on September 14, the same day our planes were allowed to return to the skies.

The only people who took a pay cut at Southwest Airlines were the company's officers, who we allowed to take a voluntary 10 percent pay reduction if they chose. (Although we exerted no pressure for them to do so, I believe they all did.) The only people who gave up their paychecks entirely were the members of the board of directors and the top executive officers, who voluntarily gave up their pay in the fourth quarter of 2001 to help ensure that we would have sufficient cash to meet our other obligations.

END QUOTE

This is where I started to get emotional.

Board and executive officers who gave up their pay for a quarter - compared to Board wanting to get paid in cash instead of worthless stock going forward.

Company's officers taking 10% pay cut - compared to company's officers wanting to take >100% pay raise via KEIP.

No layoffs no reduction in profit-sharing plans - compared to massive layoffs and canceling profit-sharing plans for all JCI3 and below and most of JCI4 through JCI6.

I am seriously considering mailing every ELT/SLT member in Nortel a copy of James Parker's book. It cost me $15 on Amazon... Perhaps if they read it, it will eventually dawn on them?

Hi Texan2,

If you get a chance have a read of "Hardball are you Playing to Play or Playing to Win?"

The first few pages sets the stage, this is the type of book all ELT/SLT should read.

Page 2 sums it up, "Softball players have no competitive advantage or, if they have one, may not know what it is or may be unable to exploit it. Some softball (Nortel) can drift along for years, finding ways - through trade loading, for example, or cost cutting to stay afloat from quarter to quarter. A few may seek to disguise their poor performance through activities such as creating shell customers that are questionable"

http://books.google.com.au/books?id=nAQ5Bl5U3WEC&dq=hardball+playing+to+play&printsec=frontcover&source=bl&ots=pFMO55Ucoq&sig=JfqN8mecbbMghhpwPTQRpDnQtwk&hl=en&ei=4bCvScC9FYGEsQOE-pnXAQ&sa=X&oi=book_result&resnum=3&ct=result#PPP1,M1

Southwest is regarded as one of the most employee-friendly companies in the world. The have a "no layoff policy", and they are one of about 10 large corporations who will not layoff or reduce employee salaries to make things work.

The belief is, you work as a team, you succeed and fail as a team too. That corporate culture breeds loyalty.

"The belief is, you work as a team, you succeed and fail as a team too. That corporate culture breeds loyalty."

MHH, Nortel was all about teams in the 90s, but it extended only as far as you could throw a Passport. Nortel's version of teaming is: you peons are a team, you work as a team, and do what we, the all-knowing management, tell you. Regardless of lip service, Nortel's management style has been as hierarchical as Ford's ever was.

The converse to your good argument is: when you create only the illusion of teaming, you destroy loyalty. For every employee that applauds Six Sigma, there is one that loathes it. Because it was foisted on us as a be-all, end-all, the savior processes that didn't necessarily need saving to begin with, and it created non-productive jobs where productive jobs used to exist. But that's just my opinion.

At NoTel you succeed as a manager/exec and you fail as a peon.
That corporate culture breeds mistrust, anxiety, burnout and insanity.

Not correct.

http://www.reuters.com/article/marketsNews/idCAN0454363620090304?rpc=44

that's why the volume is about 3 million shares per day right? lol

How many did you p/u today?

Judas Z expects the reorg done by next month? Has anything Judas predicted materialized. NO.

All you I believe losers best be running out and buying up the stock. Yaa right.
Nobody WILL EVER buy Nortel stock again.

The only objective for re-org is to "fire" employees as many as possible without paying a penny. "Business made simple"

yep, and to exit unwanted contract, obligations and other commitments. So much for ethical business.

Business By Zudas.

I guess it all comes down to what you believe?
Problem is perception is everything in this climate.
Should not be like that and at effectively managed establishments it isn't.
But we are talking Nortel here.

haha. what do you believe Scalpcutter?

Go listen to the Chris Isaac song "I believe".
That pretty well sums it up.

I believe in nortel. If history has shown us anything its that nobody can predict the future. But odds are what the "majority thought was going to happen" most likely "did not happen".

So to all the people out there who think Nortel will crash. Bring it on baby.

Bring it on? It already is on? Where is your head? In?

so the odds are the stock will be worthless with a Preferred Share Dividend to creditors?

what are the possibilities this stock can rebound again? is there a logical possibility this stock can make a comeback? Its currently sitting at 0.105, not even the latest press release of 30% down in operating expenses brought this stock up. it actually went down a penny.

any ideas?

Payments to preferred shareholder's dividends were halted just before they downplayed they were going to claim bankruptcy, which they did.

Restructuring is not a given, approved by the creditors and courts. It remains to be seen if their plan warrants merit as viable.

There has been much protest voiced in allowing common shares /stocks to trade under bankruptcy. Yet, they still trade on the TSX after at least the NYSE sent them right to the pink sheets in a handbasket.. In light of the recent downturn where they amending allowing stocks under a dollar to trade, they explicitly stated this was to assist viable companies but Nortel claimed bankruptcy.

Should they restructure with bonuses and all, they will simply issue new shares for the restructured company.Current shares will be deemed worthless, if they aren't already to most at under a penny presplit.

here are some links in connection with trading shares in a bankrupt company and what to expect

http://www.fool.com/investing/general/2008/09/15/when-companies-go-bankrupt.aspx

Buying shares of companies in bankruptcy monumentally bad idea. You're probably going to lose it all

If the company can't generate enough capital to pay off its creditors, then it will slide down the scale to Chapter 7, complete liquidation.

equity shareholders are quite literally the last people in line to receive something from the bankruptcy. They're behind the debt holders, behind the merchant creditors, behind the trustees, behind the employees, behind the tax man, and behind even the preferred shareholders.

In most cases, the company will have to sell off assets to raise money to pay creditors. In almost all cases, these proceeds are going to be insufficient to pay off all prioritized creditors in full (after all, why else would the debtor have had to file in the first place?)

It's sort of like betting on the slow and lame horse in a race: There is of course a chance it could win, but that's not the way to bet.

So, potential speculators, bottom dwellers, and Dumpster divers, the answer is that as a rule, investing in bankrupt companies (or even soon-to-be bankrupt companies) is a horrible idea. I'm in fact baffled that the SEC and the exchanges even allow companies in Chapter 11 to trade at all -- the implied return on the vast majority of these companies is exactly zero.




http://bankruptcymaster.com/News/Bankruptcy/News/The_Empty_Truth_about_Bankruptcy_Stocks.htm

"bankrupt companies, seem to trade, though nobody can give any reason why they should. There's usually no meaningful value left."

SCAM ALERT. Troubled companies also often are the subject of rumors -or downright fraud by swindlers -in Internet chat rooms. The rumormongers hope to profit from a short-term rise in the stock price. "This is very common. I see it all the time," says Brandt.

Managers of bankrupt companies often speak sincerely of their plans for a speedy turnaround, but these comments are aimed primarily at the company's creditors, suppliers, and customers -- not the shareholders.

"BRAINLESS" TRADING. The temptation may seem compelling. But wise investors will be careful. The best bankruptcy strategy for all but the most daring is usually to sell, which creates a tax benefit, say analysts.

Better yet, advise most, don't buy the shares - no matter how cheap. Shareholders rarely do well in large bankruptcies of publicly traded companies, says Brandt. Trading these stocks is downright futile, "even brainless," he says.

Consider Kmart's plight as an example of why such stocks can be dangerous.

Cap Gemini Ernst & Young also may be fanning investors' optimism. The study concludes that Kmart may yet survive, largely because it retains a base of customers as loyal as those of rival Wal-Mart. Sounds tempting, doesn't it? But given the great risks, smart investors may want to ignore this Blue Light special.



http://www.marketwatch.com/

"It's very unlikely that a company will come out of bankruptcy without canceling its shares, especially if they have filed a reorganization plan saying that's what they intend to do," said John Nestor, director of public affairs at the Securities and Exchange Commission.

"We are aware that people continue to invest and people lose money," Nestor said.

The chances of finding a bankrupt company where the shares will have value "are very rare and the odds are very much against you," said Branch.

"a sale establishes a tax loss while holding may not," he says.

Restructuring through bankruptcy is not easy and there really are no guarantees. What I'd expect them to do includes the following: Put a plan together that gets them back to cash flow positive by staff and product line reductions as well as selected asset sales -- keeping only the profitable and growing part of the company. They will negotiate with creditors for them to accept only a fraction of what Nortel currently owes them or a longer repayment period. Proceeds of any asset sales would be be used to pay creditors. They will likely look at having themselves absolved of certain obligations of eliminating the deficit in the defined-benefit pension plan. In the end everybody loses something but not everything ... at least that's the idea. The Board, bankruptcy court and secured creditors will all have to agree to the plan, based on the belief that the company, as a going concern, is worth more than being shutdown and liquidated (Chapter 7).

There are many variations on this theme. Here's one of many views on the matter: http://www.cato.org/pubs/regulation/regv15n3/reg15n3-adler.html (a US perspective).

The Cato article was quite informative and germane to Nortel's current situation. In particular the fact that Chapter 11 bankruptcy, at least under the current rules, gives management too much leverage in selecting a reorganization plan and continuing to run the company's affairs while under protections. Management can then take advantage of this lack of accountability to use the company's remaining assets for purposes that are questionable, to put it mildly.

The GDP of Canada is 1.2 TRILLION dollars ish. Is Nortel really that big a deal? Sure it pulled in around 10Billion, but someone, somewhere in Canada land is also make huge bucks for Canada.

Not fair to compare the impact of NT failing to the impact of the Big Three US Auto criminals. The combined reveune of those companies is about $450 Billion. They directly emoploy just under 400,000 and get goods and services from hundreds of contractors and component providers who emoploy several million world wide.

And GM alone employees 3 times as many employees in Canada as NT does.

All that said, I hope NT comes through in some form with as many of the remaining employees as possible minus every executive including the sales MAVP's.

Of course time is the money. One of the criteria for KEIP is the cost reductions (layoffs) objective and since the KEIP payout is in 45 days into every quarter, they want to achieve that cost reductions objective by mid to end of May. Just in time for the first bonus payout starting 2nd quarter. eh!

My close friend who works at Nortel says there is a rumour running around North American Campuses that there will be no more cash available to fund north american operations sometime between the may and september timeframe.
Maybe the re-org/restructure will be complete by may in the form of bankruptcy/liquidation?

It seems to me there is a lot of negative vibe on this site from people who actually want nortel to fail. I think many of them lost a lot of money and trust from nortel.

But none-the-less. I think the Canadian Govnt will take a similar U.S.A govnt approach to this company which is... "its too big too fall". My prediction is the Canadian government gives nortel a few billion interest free for a few years until they rebound.

Is this even remotely possible in the current state?

"I think the Canadian Govnt [sic] will take a similar U.S.A govnt [sic] approach to this company which is... "its too big too [sic] fall [sic]". "

Are you kidding me? Compared to the auto or steel or timber industries?
I've a brother working in automotive parts, uhm, was working. A brother-in-law driving transport trucks, Oh, was driving. Etc.

Dan, no one gives a shit about Nortel. It failed. Let it stay that way. The only way we're going to climb out of this economic hole is to produce real products the real world will pay for. Nortel hasn't lived in the real world for the last decade. And most of it's employees are the same.

And learn to write grammatically correct English. Geez.

Yes and there is no place in North America to produce real products that the world will pay for. Send everything to turnkey, polanski, mehico, china.
Then collect your bonus. Do Not Go Directly to Jail.
Ha Ha.

p.s: that's what microsoft word is for.

He he. All right. That's a good one. :)

haha. "come together. . . right now. . . over me"

Don't count on the feds, provincial or states.
If Nortel was going to helped out by the government it would have happened by now. The people who have been let go or will be let go would not be suffering like this right now.
There's been no bones thrown by the government except the one for EDC so more jobs can be outsourced.

your comparing the US economy to Canada ? What a joke. Canada has about 1/10 the people of the US. And Nortel has about 1/1000 of the total Canadian population - many of which aren't even in Canada. Nortel doesn't keep enough businesses alive in Canada to be too big to fail. Nortel deserves to fail because that is what free markets do to companies who cannot succeed because of bad decisions.

i'm sure the canadian federal government would love all their government run offices to be buying equiptment and closing contracts with Cisco and Chinese Huwaiwai.

If nortel was not the only canadian company of its kind you would have a point. If some nortel technology was not years advanced of the competition, again you would have a point.

the point i'm trying to make is its not in the country's interest to let Nortel fail. Not to mention future canadian developments, the impact on the TSX, and God knows what other snowball effects it could psychologically have in Canada if Nortel falls.

what % of the R&D spend is actually in Canada ? What percentage of the employees are there ? I could see Nortel retreating back into Canada with government gurantees this won't solve anything because they will have lost their footing in the rest of North America. At this point I don't think Nortel matters as much as people think. So many people have gone thru that place and moved on with their lives. The rest will soon be forced to also.

"... and God knows what other snowball effects it could psychologically have in Canada if Nortel falls."

LOL. You're kidding, right? No one will care. It'll be a headline in a newspaper people might notice, if they even bother with the business section. No one cares. They've more immediate problems to worry about. Like their own jobs.

Laid off Nortelers can get in the line like everyone else.

Nortel is the largest private sector employer in Ottawa, Canada's capital, and the largest spender on R&D in Canada, and is also the largest North American Telecom supplier. Also, it has played a central role in the development of Canada's high technology sector. A lot of people do care about the future of Nortel, but there needs to be more political awareness and action on the part of Canadian engineers and the Canadian Federal Government, as well as Provincial and local governments.

Oh ya. Here we go. That old fashioned sense of entitlement that goes along with everything Nortel.

The salad days are over, dude. Move on.

I don't think Nortel is big enough to warrant a federal bailout, even from the Canadian government.

The Big 3 automakers employ about 200 thousand people within the US (not including foreign workers), give or take. Comes out to one person directly employed by the automaker per 1500 (approximately) people in the US.

Nortel has a total headcount of about 30k for now. How many of that 30k are employed within Canada, rather than a CoE or a US campus? If Nortel doesn't have at least 20k employed within Canada, Nortel isn't big enough (per capita) to warrant a bailout (IMNSHO), at least on the basis of headcount, nor %age of GDP.

Look at how much R&D Nortel invests in Canada (http://seekingalpha.com/article/106018-nortel-is-still-canada-s-r-d-champion), which I believe is also key to any "bailout"

The Canadian government will not bail out Nortel. About 6,000 NT employees work in Canada with skills that are viewed as highly transferrable. This pales in comparison to the numbers and situation of most other troubled industries in Canada: automotive, mining, etc.

you are right.

So how is it even remotely possible to get out of bankruptcy? Do they have any divisions worth billions of dollars which they could sell and still stay alive in this economic crisis?

I thought government bailout is the ONLY solution to staying alive at this point.

Remember it is not out of bankruptcy, but bankruptcy protection.
That protects you from bankruptcy.
Don't confuse the two.

Mike Z has a plan....doesn't he always....and he's yet to deliver on any of his promises. His plan is to fill the pockets of his executive team just before they close it down and leaving his employees without severance or a pension. Thats what it looks like.

I think it will be a process with 3 major steps.

1 - Business Plan that identifies the structure of the future organization and core focus areas. I believe this will include the sale of a major business unit that can fetch around $500 Million in proceeds.

2 - Execution of the Business Unit sale within the guidelines of Chapter 11. Similar to the Alteon sale, a Stalking Horse bid would be accepts then a time period to allow for competing offers. Sale of a major business unit will have a direct impact on revenues, SG&A expense, R&D expense and headcount. Headcount transfer could be around 2,000 to 3,000 people depending on the business unit sold. I personally think it will be the Enterprise Solutions unit that gets sold, with the Nortel brand being retained for the Carrier Networks business.

3 - Restructuring Plan for Asset and Liability restructuring. Various Real Estate properties, plants & equipment could easily be sold. For instance there is a campus in Calgary currently for sale and there has been a lot of talk around the Ottawa campus being taken over by the Government of Canada. With this, the primary creditors will be compensated at a much lower rate than the current debt levels. Perhaps it could get to 25% with an equity offer in place to gain part ownership of the company after exit from Bankruptcy Protection. Who know how large of an equity offer would be in play but it wouldn't surprise me to see it slightly less than 50% of the total new company. If they retain this equity over 5 years with a Preferred Share Dividend, then that financial incentive would give them a piece of the action against future earnings.

There are many posters on this blog that simply want to see Nortel fully destroyed. Although this is possible, I highly doubt it will happen from a pure business sense. Then again, a real business discussion is pretty rare on this blog these days. It would rather support speculation and hatred of the company and it's employees at all levels.

more koolaid and horsefeathers

they couldn't sell business unit already, give it a rest

thinking they can appease creditors is die hard pathological optimism given no proverbial plan with their record of forecasting on the way to bankruptcy has been formulated let alone approved yet. Analysts predicted a traditional bankruptcy before they even folded.

keep believing toungeincheeks and let me know how your invented speculations makes out, your optimsim doesn't seem to have a great track record so far

As trying to turn the employees agaionst the proven critics, look how much money we would have saved investors vs. your happy talk to this day. No proven critic has anything against the employees, they have repeatedly stated they are on the good employees side. Not the crooks still there as fraud trials loom.

Your posts reflects poorly on honest and ethical conduct with your fabricated attacks. Shame on you, like your pumping over the years trying to cost readers from over 99% of its value to this day. Instead I call you a Nortel lover and advocator, which is worse, go watch one of Deskjockey's videos to see. You are the employees worse enemy instead with your selective reasoning,

Excellent post TIC. If your analysis is accurate and your hunch is correct about Carrier Networks being the remaining Nortel entity (which makes sense looking at the financial results of Q4 and several quarters prior), I would expect that LTE must (or at least should) be retained as an asset to gradually replace the declining revenue in GSM and CDMA, otherwise the future value of the business emerging from Ch 11 will be diminished greatly and the Creditor’s equity stake or “piece of the action” will be correspondingly diminished. The part that confuses me in this theory is that, when questioned by analysts Sept. 17, Mike Z said that "what we did with UMTS and WiMax are examples of what might happen”. http://www.unstrung.com/document.asp?doc_id=164024

Excellent post responding you yourself in the same writing style?

This is not truthful or ethical tongeincheeks as you were doing on Yahoo messageboard, how shameless. Busted yet again.

Oh please let it be the Enterprise Solutions unit.

Good analysis.
Holds alot of water.

I agree, TIC has very good instincts and comments. What all of us still inside Nortel want to know most is which division will be sold (Enterprise or Carrier Networks) and whether certain campuses/locations will close completely (and when) -- or if we should stop wondering such things and prepare for Chapter 7. It is hard to be patient as these decisions impact those of us on the inside significantly. And Nortel execs are not giving us any hints as to what is going to happen.

Oops, does that mean they don't know themselves? Quite possibly.

again, same poster... responding to itself.
Same artsy writing style, same subliminal pumping.

Uh, protosphere, you're way off-base here. Just because I thought TIC made a good post, does not mean I am him. I'm not even a "him", actually. I've thought some of your posts were good too. I've watched all the Nortel Downfall vids (love 'em), don't "believe", and am not drinking the kool-aid. I just think that what TIC said made sense from a business perspective. Can I not agree with someone without being accused of being that person? Sorry, but you're just wrong on this one.

As for your "artsy writing style" comment, I ever thought of myself that way, but perhaps I can parlay it into a post-Nortel career. :-)

Yes, they don't know.... As Lowe said in his GIS, he "doesn't have a plan" but instead has "a framework" by which he makes decision.

The shameful secret is that his "framework" is a dart board....

"The shameful secret is that his "framework" is a dart board...."

Love it!

They are hiring the investment banking firm Lazere Freres t(for a fee of 15million dollars if they are successful) to look for buyers for these separated divisions. The "plan" is all hinging on getting suitable buyers ...At this point, there isn't a whole lots of bites ..they will continue to burn cash, call it quit in May and go into chapter 7!.

As usual, Z and his PR people are out of synch.

How much of the available cash will be available by then as they move fast to keep customers and cut staff adding severances to creditors list.

At 2008 year end with 2.4B cash / 4.5 debt
what is left of "available cash" today or by May for that matter
What will debt be by then with growing list of creditors

There are also legal fees, insurance premiums, growing severance added to creditors list, etc., with declining business that effects their position even greater post bankruptcy by the day

What debt to available cash ratio will be presented to the growing list of stalled creditors to approve this proverbial reorganization plan by then.

Note the added 50% bonus incentive on restructuring /reorganization approval

"End of this Month" after asking for 90 day delay, having to move fast to keep customers with possible surprises coming earlier.. what's next? More forecasts trying sell the plan based on the future? Mike expected a lot if history is to be of any lesson.

Why not go back and read the Monitor's Report of Cash Flow projections ending May 2, 2009. The real answers are right there in front of your nose rather than making up more speculation.

Also learn the timing difference between CCAA proceedings and Chapter 11 proceedings. Chapter 11 provides a full stay throughout the entire process without the need to request and extension. CCAA requires extension requests to be filed and approved by the courts. Given these proceedings are multi-jurisdictional, timing must be kept consistent for all parties.

Where does it say what they anticipate in cash by then or increased liabilities with new severances liabilities, insurance premiums, etc with rapidly declining business, etc... how can they forecast this tongeincheeks?

Why dodn't you provide these projections in your argument than claim we are making up speculation which is what speculation is by definition.

Last time you neglecting their $70M dedicated to operations outflow under the E&Y period report you quoted. How many times must we correct your rude arguments and KoolAid happy talk. You did not thank us for correcting you then but argue we neglect projections now.

And what does the CCAA have to do with the weather, besides, they had to request an extension approved by the courts contrary to your claims anyways.

What is it that your undying optimism does not understand about what bankrupt means? Keep drink the koolaid if you believe Nortel will successfully restructure with bonuses like anyone hoping government will bail this proverbial tanker.

Come back and tell us what the projection ending May 2nd, 2009 are that you claim are right under my nose than speculating . Are they like their endless forecasts of turnaround or buying opportunity, do they include rate of business decline or increased liabilities like severances? How can they project this by then? Show what you call "real answers", heh... like REAL investors huh? haha

I don't think anyone knows what's going to happen 2 weeks from now much less two months. Nortel will be forced to restructure the business for the new economic reality come April/May. That could mean another 25% drop in revenue. If its across the board, it could mean more peanut buttering of layoffs. At that point, its probably not even worth keeping the place open if each person has to work 18 hours.

"I don't think anyone knows what's going to happen 2 weeks from now much less two months. "

I do.
Chapter 7.
=)

I swam against with the believers vested interest for years to now and I have never been more sure.

The math defys any turnaround hope, I disregarded what bonus happy Nortel claims unlike the analysts and just ran with the obvious from restatement dates to triple profits to bankruptcy. Chapter 7 is like pay me now or pay me later, inevitable. They can not burn their debt and they do not make enough, simple as that really.

They cannot do peanut buttering layoffs.
Apparently they have stopped doing that already so they got that right.
It will be mass layoffs targeting entire groups most likely.
No more two from this manager and two from that manager.
That method is dead.
It should be the manager and his entire group.
Likely to see that more prevalent.

Clearly you dont' know the culture inside Nortel...That's not going to happen...The directors, the managers will still be floating around..the old boy clubs are in full effect now as we speak.

ONE OF THE THE CULTURES INSIDE NORTEL IS
"SUBTLE DISCRIMINATIONS" . IT IS VERY DIFFICULT TO
DETECT, BUT IT'S IN PLACE!!! AND IT"S THERE!

Well it's their funeral.
They can do what they want I guess.

I say they will complete the process by Jun 2010. The only way they get out quicker is if all the stakeholders (creditors, pensioners, etc) are made whole - which is not going to happen.

I wonder how many employees will NT have after the reorg... 20k maybe?

Might be 5 to 10 thousand.
Who knows.

I think there is a different way to think of this. It is more important to understand the total employee populations by Business Unit, then to understand the scope of products and solutions offered by each Business Unit.

Given that Nortel is moving quickly to a Business Unit focused structure and has setup their Balance Sheet to allow them to sell or spin-off any of the Business Units. The total employee population becomes the sum of the Business Unit structures.

I personally do not think that Nortel can be successful and relevant by keeping all of their current businesses. Something needs to be shed but who knows what that will be. However, I also fully expect that employee reductions in the shed business will happen before the transaction closes.

Kool Aid

I disagree with the very first two words in your post!

Zeroman told the Financial Times on Tuesday March 3 that the company was targeting mid 2009 to be out of bankruptcy. Then the very next day some Nortel PR person denies it.

Just one implosion after the next. Nortel's competitors must be loving every minute of this.

Um - this story is no longer accurate, there was a subsequent correction....MC

I thought I would share a few captions from the famous John Galt speech in Ayn Rand's novel "Atlas Shrugged":

"I am speaking to those who desire to live and to recapture the honor of their soul. Now that you know the truth about your world stop supporting your own destroyers. The evil of the world is made possible by nothing but the sanction to give it. Withdraw your sanction. Withdraw your support. Do not try to live on your enemies' terms or to win at a game where they're setting the rules. Do not seek the favor of those who enslaved you, do not beg for alms from those who have robbed you, be it subsidies, loans or jobs, do not join their team to recoup what they've taken by helping them rob your neighbors. One cannot hope to maintain one's life by accepting bribes to condone one's destruction. Do not straggle for profit, success or security at the price of a lien on your right to exist. Such a lien is not to be paid off; the more you pay them, the more they will demand; the greater the values you seek or achieve, the more vulnerably helpless you become. Theirs is a system of white blackmail devised to bleed you, not by means of your sins, but by means of your love for existence.

"Do not attempt to rise on the looters' terms or to climb a ladder while they're holding the ropes. Do not allow their hands to touch the only power that keeps them in power: your living ambition. Go on strike—in the manner I did. Use your mind and skill in private, extend your knowledge, develop your ability, but do not share your achievements with others. Do not try to produce a fortune, with a looter riding on your back. Stay on the lowest rung of their ladder, earn no more than your barest survival, do not make an extra penny to support the looters' state. Since you're captive, act as a captive, do not help them pretend that you're free. Be the silent, incorruptible enemy they dread. When they force you, obey—but do not volunteer. Never volunteer a step in their direction, or a wish, or a plea, or a purpose. Do not help a holdup man to claim that he acts as your friend and benefactor. Do not help your jailers to pretend that their jail is your natural state of existence. Do not help them to fake reality. That fake is the only dam holding off their secret terror, the terror of knowing they're unfit to exist; remove it and let them drown; your sanction is their only life belt.

I found this to be a fitting caption. There are others but this is all for now.

The author is an acclaimed female philosopher I have heard of but have never read until now. Excellent stuff, she writes well. This is the best female author I have ever read.

I only disagree with but one line, "Be the silent, incorruptible enemy they dread. When they force you, obey."

I would have added an exponentially greater passion to defy the "the looters" holding hostages along the lines of "give me freedom or give me death". She works within the confines of the enslavement through passive than active objection. A great read nonetheless. Thanks =)

Does anyone know who the insurance company is that covers the liability of the Directors and officers at Nortel? Specifically who is the DNO carrier? Also what the level of self insured or the deductable for Nortel ?

The FT article says NT will not only complete the re-org but it will also emerge from bankruptcy protection by mid-year...Can Zman pull this through....

There's a rumor that come July the new-Nortel will be having a sales conference in LV. Perhaps they can emerge earlier than 12-18 mos as touted.

Drink your kool aid, Believe!

.....ugh!

nah, I ain't from the kool aid a.k.a I Believe team....that was a sarcastic comment I made..basically, I feel they have no clue...chk this out..looks like they denied Z's claim: http://www.itpro.co.uk/610081/nortel-denies-plans-to-escape-chapter-11-by-mid-year

You're joking, right?

No.