A Letter to the DOJ Supporting the Avaya Deal

I wish we could get more details behind the IRS claim. Anyone know how any public disclosure re this would work or be available?

If you have not already, you can find it on the Epiq Systems link claim # 1935. Not a lot of information except for the amounts per year including interest.

http://chapter11.epiqsystems.com/NNI/claim/search.aspx

Thanks. I wonder when, or if we cam gain access to more details. I am curious about when Z & company, and BoD would have been apprised of any problem with the US IRS in past years to total this astonishing amount.

This is all moot compared to the big story.

US IRS FILES CLAIM OF $3 BILLION AGAINST NORTEL

Say goodbye to pensions, severance, anything. Here comes Uncle Sam and he wants everything. Beaver Harper is nowhere to be seen. Also the only country not taking care of its pension interests is Canada. The US, UK and others all did to protect their pensioners.

So I don't think I am going to vote for the Conservatives ever again.

As far as becoming "anti-competitive" is concerned e'er so I vaguely recall Bell being cut up to enable "competition"... Heck, I Google it and this nigh 40-year-old article from the NYT archives shows up in second place:

http://select.nytimes.com/gst/abstract.html?res=F40E11FD3F5C1A7493C0A8178CD85F448785F9

July 12, 1970

How times change! That most monopolistic of all monopolies the American Telephone and Telegraph Company is finally faced with the threat of competition.

Whew. Finally. That sure worked out so well...

Now is not the time for mom and pop telco shops to sprout up everywhere, putter and cluttter with LTE, Wimax, Maxwi, Wi-TE, mini-LTE 1.5, '12-18G' etc. technology while merge at the drop or rise of a stock. The gummint stepped in and fixed it already a fee times over, now its time to let the industry clean up its huge mess, simplify it and move on while punishing the evildoers.

At least the remaining employees are still receiving paycheques....For some it has been an unexpected bonus really. Many of them were ready to go by March but this thing has been dragged out for months now.

Whatever happens to the Nortel, the employees can only hope to jump on another boat and leave the carcass behind.

that is their severance.

Hey, the courts, creditors and Nortel management are all allowing this to happen by dragging this out longer while continuing to pay out BONUSES for performance.

I hope this opens the eyes of the creditors to put more pressure on the courts and admins to sell and shut down quickly. The longer they drag this on the value of each sale will plummet. I mean how long can it take when the Chrysler/Fiat deal took what 45 days.

The Canadian Government is doing what to close the Wireless deal? I mean really what is going on.

They have rigged the Avaya deal where as they could win the bid and not even close it?

I am just in disbelief that this can take place but we have our courts. governments and of course the brilliant Nortel Management to thank again.

IRS hits Nortel with $3-billion tax claim
U.S. agency targets company’s dwindling assets
By James Bagnall and Bert Hill, The Ottawa CitizenAugust 28, 2009 6:20 AM


Just out.....

There seems to be questions in connection with this claim that would wipe out the value the bonus happy Keaytone management sought to preserve for creditors now going to the taxman.

(Note that CEO and Binning are also being sued for misleading and using tax credits as their largest asset, beefing books, they sought to clean for so long)

Perhaps due to the benefit of these tax credits under profit, they become payable when assets that were used to generate them are sold.

Otherwise anyone could finance one huge mess of a loss (while paying bonuses), financed buddies (paying bonuses for financing) only to fold (and still pay bonuses) only to hand it over tax free to big business creditors (with bonuses) when they exhausted the assets and the taxes on the sales of whatever they generated.

Makes sense to me, dunno what the puzzle is about.They avoid taxes without profit as the sale of the assets are viewed as pure profit or taxable given they generated these tax credits to begin with.

As usual... Nortel is screwed.

"Otherwise anyone could finance one huge mess of a loss (while paying bonuses), financed buddies (paying bonuses for financing) only to fold (and still pay bonuses) only to hand it over tax free to big business creditors (with bonuses) when they exhausted the assets and the taxes on the sales of whatever they generated."
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You got it Proto: NT's CEO and insiders business exit strategy!!
Duh! This was their exact planned course of action, and NOT a re-structuring plan all along, and everyone: courts, judges, Gov't, BoD just stood around watching.

OK - question:

Is there a clause, in the Avaya bid, which could preclude completion of the deal, given this filing by IRS ? Will Avaya have to eat/pay a portion of it ?

This is very, very, bad news.

MC

Good point. Buyer beware!

The buyer did not generate these tax credits or tax liabilities. However, if some one buys a car with a lien on it, the buyer is liable for that lien.

Could a similar situation evolved after others bought their debt laden assets? What if the funds generated from the sale were inadequate to pay this tax.

If Nortel is bankrupt with no money, the buyer could not even chase who sold them the debt laden car. I suspect Avaya should have covered their assets to this effect but did they. I also question whether Avaya's legal chessboard is as powerful or experienced as Nortel's after so much mega accounting and litigation, creatively printing paper and rewarding themselves to do so, protected under bankruptcy and still rewarding themselves... to creatively take advantage of any legal guidelines and loopholes they can and to traditionally leave a mountain of bagholders in their mountain high wake yet again...

Nothing, Nortel, the poster boy for shamelessly lacking credibility under every legal loophole it can muster with an army of lawyers who can rewrite the laws of physics, surprises anyone anymore.

Ethical companies paid severances over big business creditors and did not hide behind bankruptcy laws, they didn't parallel the likes of AIG bonuses burdening UIC than their severances, reluctant to testify for this until subpoenaed, only to torch the farm the very next day and bouncing before even more crap hit the fan...

What changed since Dunn? A board members law firm defends him for the largest fraud in Canada ... What changed for the better

Nortel makes a mockery of our system, their CEO might think he could have handled even larger companies but our system can't even handle this one.

Who is stronger, tyranny or the system? In Canada this is a dumb question but the US is stronger at least, no wonder 80-% of our industry is owned by them.

Canada protests 150 clients robbed of 50 million setting uip a new coalition ( New National Coalition against White-Collar Crime ) our stellar PrimeMinsiter fully endorses and note that Nortel has robbed thousands of investors of billions of dollars to thwart this.

http://www.theglobeandmail.com/news/national/victims-of-swindlers-to-launch-national-coalition/article1267502/

http://www.cbc.ca/canada/montreal/story/2009/08/25/montreal-fraud-victims.html

(Nortel /tryranny deserves what it gets after being extended so many liberties to always bite the hand that feeds it)

Imagine Nortel selling the assets and the buyer being surprised by the burden they unknowingly just acquired. How can insolvent teflon Don Nortel be liable as they claim they didn't know ...yet again...,as they traded options for cash again and got bonuses again after folding of all things, when perhaps they should have indeed known again given this whopping 3 billion buck gravity=)

That's all they need, is more lawsuits to add to the mess.

Nothing has gone right following the largest fraud in Canada... nothing changed, and certainly not for the better ...in any form.

3 billion?! ... wow!

"The buyer did not generate these tax credits or tax liabilities. However, if some one buys a car with a lien on it, the buyer is liable for that lien.
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What about the CDMA/LTE sale to Ericsson? Is Ericsson not liable because at the time of that sale being approved no one knew about this 3 Billion? It seems that all of the buyers of the assets should be liable and not just picked out due to a "timing thing", especially as I am quite sure this 3 bill has had a long long paper trail and many lawyers docs avoiding it for years now. Isn't that once again, Fraud to not disclose this?? Is this part of why Z took exit stage left, before the sh*t hit the fan?

Jeezuz Christ !

http://www.ottawacitizen.com/business/hits+Nortel+with+billion+claim/1937019/story.html

It is now, truly, over.

MC

its like flogging a dead horse, how much deader can it get =) A whopping 3 billion?! Yikes and wow!

The U.S. is on steroids, having recently gone to war and nuked Swiss Banks traditional secrecy to have them roll over on their U.S wealthy clients to expose circumventing tax. The U.S. is an economic powerhouse, it takes no prisoners and perhaps overlooks antitrust in its own back yard others do not like Europe, protecting its own corporations vs. offshore ones like DeBoers, etc... =)
__________________________________________________

"Since tax claims often receive priority in a bankruptcy proceeding, this raises the possibility of wiping out a majority of the claims from U.S. bondholders, suppliers and employees owed severance pay."

"This, in turn, will intensify the pressure for U.S. claimants to prevent further transfers of cash from Nortel’s U.S. operations to Canada."

"Canadian creditors had been concerned that Nortel Canada’s low cash balances will translate into a claims settlement ratio as low as 12 cents on the dollar."

"The IRS move would decimate the U.S. claims while doing nothing to improve the situation for Canadian creditors."

"Nortel on Wednesday was unable to respond to a request about potential tax issues."

__________________________________________________

As everyone stands around scratching and wondering how a prioritized "$3-billion U.S. claim for back taxes, interest and other penalties" reared its ugly head. Heh, with no warning or any of their renown wonderful accounting being remotely aware when perhaps they should have given the gravity of claim. This alone would have folded them before downplaying to announce bankruptcy in January.

The U.S. is on steroids, having recently gone to war and nuked Swiss Banks traditional secrecy to have them roll over on their U.S wealthy clients to expose circumventing tax

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Yep, this just on the news in the past few days. The culture now has shifted and people are angry and no one is escaping scrutiny after the Lehman debacle, followed by all the banks belly-up, AIG, and Madoff. The wealthy better take heed because instead of admiration, or jealousy, they are now often suspect of fraud and cheating which used to be ignored or smoothed over, not anymore!! The gov't is out to get them and re-coup some money.

How did Dunn and Z get jobs at the IRS...!?

Ah, well, it looks like "someboy" needs cash to support their petro-war machine.......