Matlin Patterson Hires Ex-Nortel Executive

I'm curious to find out more about the speculation that MP will sell Enterprise. Does anyone have any real info?

He is the CEO of a funeral cremation company with an underwater cemetery called Neptune. http://www.neptunesociety.com
according to the news he is being hired as an advisor. He is also a creditor acording to the documents stored in epiq.

This is good, it means that MP is serious about buying Nortel.

Do they think they can sell Enterprise easier or for more than Nortel? How did they become such a large bagholder to begin with.

Same gamble, same bagholder, and another insider will save the day, same old

heh, with 400B debt for equity, and if EDC gave them 300, that would already be 50 above NSN bid =)

who ever acquires them should also beware of the many still there that may surface at upcoming trials to plague them

bah… humbug… again

I like it. MP is better than liquidation.

I, like most of the CDMA/LTE folks, want NSN to be the winner for the bid on CDMA/LTE. Unfortunately, I dont think this is going to happen. In my opinion, majority of the employees, pensioners, ex-employees are going to be the losers. The current majority debt owners who get stocks in new Nortel that emerges will be the winners, if the Nortel turnaround succeeds.

This MattlinPatterson group seems to be very aggressive, and very smart, and have tremendous experience in this field. Here is some history on these folks that I dug up on the web:

Huntsman group:
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In 2002 MP bought a huge percentage of the company’s junk bonds for 20 cents on the dollar. MatlinPatterson then invested around 500M$ into Huntsman, financing top acquisitions of some rival chemical producers in the past two years, including spending about $200 million to gain control of Vantico Group SA, a Belgian resin maker that was coming off its own disappointing leveraged buyout. MP then watched the company get sold in July 2007 for $10.6 billion. MP made a neat income of US$1.3Billion.

MCI (formerly Worldcom):
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To thousands of investors, WorldCom Inc.'s revelation on June 25, 2002, that it had committed the largest fraud in history was a shrill alarm warning of impending financial disaster. But for David J. Matlin, the announcement was more like a starting gun going off in a race to take control of the company. As soon as WorldCom's fraud was disclosed, MatlinPatterson Global Advisers LLC began buying up company bonds, whose value was plummeting so quickly they could be acquired at an average price of less than 15 cents on the dollar. Matlin's large stake gave him a seat at the table as WorldCom crafted its reorganization plan. MCI was successfully sold to Verizon for $8.5 billion in cash and stock.

General Steel (formerly American Construction):
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MP had 6% holding. The company is doing ok.

Venturi Partners, Inc
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Formerly known as Personnel Group of America. MP got 46% controling interest and then sold off to Comsys IT .

Flagstar Bancorp:
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MP invested $250 million in Flagstar Bancorp, a Troy, Mich., thrift company that lost $56.9 million last quarter, mostly on bad mortgage loans. The deal's completion hinged on Flagstar's receiving an additional $250 million from the Treasury Department's Troubled Asset Relief Program. Upon the completion of the transaction, Matlin Patterson will own about 70% of Flagstar's outstanding stock and have the right to name more than a majority of its board members. The deal enhanced Flagstar’s position with banking regulators and the Treasury, which tentatively approved the bank for the TARP Capital Purchase Program. In March 2008 Matlin Patterson led a $1.35 billion rescue of Thornburg Mortgage. David Matlin and Mark Patterson, the distressed securities specialists who founded the investment firm, sit on Thornburg’s board. Now the buzz is that Flagstar and Thornburg will merge, the TARP-backed bank will finance the troubled mortgage business and Matlin Patterson will sell its cheaply bought shares at an impressive profit.

Brazilian Airines Varig:
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MattlinPatterson bought the bankrupt airlines for US$500M on 20th July 2006. On 28 July 2006, they cut 60% of its staff. Laid off 5,500 of the 9,485 jobs. On 28 March 2007 it was sold off at a loss to some other
airline.

Standard Pacific of Irvine
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May 2008: Standard Pacific got into a financial pickle by, among other things, losing $216 million in its first quarter after losing $767 million in 2007 and having its long-time CEO “retire.”. MP invested $530M into the troubled home builder. Once the news came out, Standard Pacific’s stock soared. Traders bid up Standard Pacific’s bonds, too.

General Strategy Of How MP Works
===========================
David Matlin (in his early 40's) together with Mark Patterson started
MatlinPatterson. David has been running vulture funds, since 1994. MatlinPatterson's approach sounds deceptively simple. It generally tries to
take control of the bankruptcy process by buying the junior bonds in the
capital structure. These are cheaper, because they are riskier. However, if
you get enough of them then you can get a ‘blocking position'. A ‘blocking position' comes courtesy of American bankruptcy law, which stipulates that
two thirds of creditors have to accept any reorganization under Chapter 11.
Chapter 11 is a section of the bankruptcy code, which allows a company to
get rid of some or most of its debts to eventually resurface and continue
trading rather than to go out of business permanently. Once in control
MatlinPatterson will role up their sleeves and get down to business
sometimes with, but mostly without existing management. Mark Patterson maintains it is not as difficult as it looks to get a ‘dead'
corporation breathing again. He feels that one of the most common
problems with troubled companies is management's denial: “In fact, one of
the most common problems in struggling companies is management's refusal to acknowledge the problem. Denial is a terribly common phenomenon, but
an honest assessment of the situation is vital to solve the problem. Find out
what the true value of the company is, then exercise your operating
options: defer accounts payable as long as possible without violating
contractual obligations. The restructuring of aggregate debt is a number one
priority, and the fiduciary obligations shift from the stockholders to the
creditors.”

If memory serves me correctly Mr. Joannou left Nortel to join a funeral company. Not trying to be a smartass but is this not all too coincidental …–bb

I agree, but even if that were not the case, I'm sure MP will have no use for MZ and will purge him in short order if they are successful.

Mike Z is the problem not the solution for Norel name!

…Cisco's making sure of that… ;p

>>> And the Oscar goes to: Nortel France employees ! <<<

Now THIS is creative ! My hats off and clapping loudly
for this demonstration and video !

That lawn in France could just as easily be the lawn at Carling.

Question is: why isn't it ?

http://www.youtube.com/watch?v=mlkk1SPeuzw

MC

I think its pronounced “hwon-yu” (in a nod to his Latin roots) which is perfect. Nortel's new global ad jingle could be “Show me the Way”. Replacing
“I want you, to show me the way” with “Di' Hwonyu, This is the Way” is an instant classic.

(“Di” in a nod to a certain popular, if deceased, princess)

MattlinPatterson's past performance is pretty good. They have tremendous experience in turning around sick companies, and making huge profits off their efforts, usually with stringent cost cutting measures and management overhaul. I think MP may not be as weak as you think they are,

The McFarlane initiative sounds interesting and this is the first time I've heard of his pitch. For a Nortel brand to have a chance in the future, I think it needs a Carrier focus, especially in Carrier VoIP and Optical where Nortel has many strengths today.

If they were able to also license LTE intellectual property, then perhaps they can figure out a migration strategy to evolve from 2G GSM to 4G LTE without the need to deploy UMTS/HSPA. Not sure if that is technically possible or the impact it would have on user devices and spectrum, but something worth a look to see what is possible and what their customers really want.

So did Cerberus until they met Chrysler.

MP has a record of injecting some cash. Nortel is well beyond the point of a cash injection fixing it.

We already had one group that thought they could fix Nortel by cutting and managing their way to profit (Mike Z and cronies) and these guys know even less about Telecom than Mike Z at the beginning.

These guys haven't had an original thought in years and their collective record speaks for itself.
So where are our Great leaders today?
Martha – Booted from Microsoft..
Alvio – Demoted and still trying to sleep with himself..
Dion “The Chosen One” – Still looking for someone / ANYONE who will listen.. (This package includes wooden cross)

You can fool some of the people all of the time…

Maybe, maybe, maybe Nortel is actually on to something so beyond revolutionary with its constant underwater theme…

maybe they're developing some kind of aqua wireless technology. Imagine utilizing the existing oceans as free and fluid WAN clouds, then sewer and water lines and pipelines everywhere as, well, information pipelines…

“Sleeping with the fishes” redfined as a synergies leveraged telecom paradigm…