Nortel Resolves IRS Dispute

By Mark Evans | Published: October 9, 2009

Nortel and the Internal Revenue Service have reached a settlement involving the IRS’ claim that Nortel owes it $3-billion.

In a court filing, Nortel said details of the an “interim resolution” will be made available on Oct. 13.

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  • 27539

    My, my – just what kind of ankle-grasping “interim resolution” did Norhell come up with this time?

  • ntpurgatory

    I'm sure it will look like this: The US Gov't will get theirs…

  • got_out_years_ago_ty

    Truly looking forward to the day when this blog is gone, the Nortel name is gone, and no one gives a s$%t.

  • less

    Maybe Frank Dunn has offered to restate the IRS' 2009 earnings showing a $12-18 trillion surplus, plus one free stress ball for every IRS employee – provided they outsource ops to cost-excellent Somalia?

  • ntpurgatory

    Guessing by end of 2010, Nortel will be ready to go Ch 7 and sell the furniture and shut her down completely… 1H10 will be closing the asset sales…

  • MyHeadHurts

    Nortel Business Solutions (NBS) will live on for quite some time. M&A is handled by this part of Nortel. My guess is NBS will exist as a separate entity to service the IT needs of the various companies who have purchased Nortel IP assets. Many of the assets require protection from each purchaser and are cross licensed, so, my feeling is this will be the part of Nortel that remains. I know the reason MSS is not going anywhere :)

    If they where smart, they would do what Terry Curtis wanted to do to Nortel IT years ago.. spin it out, and let it compete with CGI, etc. They could do a competent job, as Nortel's R&D IT infrastructure (not the lab crap!) is run very well.

  • ntpurgatory

    NBS purely a cost center sucking $ away from potential payouts. I think they will minimize the time NBS remains. This is why extended renewal contracts for customers that haven't been sold with a division only are allowed a 1 year contract. No multi-year contracts are being allowed. The shell that remains will spend 2010 and maybe a quarter into 2011 tying off the remaining legal obligations of the Nortanic before someone grabs the sign off the buildings and they go Chapter 7…

  • Troller

    Not strictly speaking a cost center– the idea is that Ericsson, Avaya, Ciena, etc. will pay NBS for the transition IT services. So in theory they're not further draining the creditors, they'll be draining the buyers! ;-)

  • gone2moro

    Suspect the settlement involves me not getting my 3 cent severance settlement check…..

  • GoProto

    If so, it will only be the First Restatement of many more to come..Start Numbering Them Now.

  • GoProto

    From an earlier AAN Thread:

    “Nortel claims it doesn’t owe the IRS anything because there “is no reasonable or realistic basis for the IRS claim”.”

    _________________________

    Ok, so if you don't owe anything, what is there to settle?? Uh oh, you don't think that once again Notell was Not being truthful do you??? Couldn't be.

  • MyHeadHurts

    Agree!

    ntpurgs comment about the contracts is unrelated to the NBS side of things. I'm pretty sure those transition IT agreements will live on. It will take years for Nortel products to be integrated into the buyers solutions. Some might even take them whole without any changes for a while. So, I agree, this will be one way that “Nortel” will make some money back. Not much, but, it will at least be cost positive for a change.

  • protosphere

    “In a court filing, Nortel said details of the an “interim resolution” will be made available on Oct. 13.”

    Who will table this “interim resolution” and what makes them think the IRS will accept it?

    Perhaps Nortel wants to keep judge Gross intact as the IRS wanted him removed. This might prove interesting.

    And how much of the $3B the IRS claims Nortel owes them are they willing to list from their long extended disarray of unreliable numbers?

    With their conflict of interest E&Y monitor trying to appeasing their big business creditors pals, it will also be interesting to see how much they might try to settle for as everyone increasingly eyes what is left. And just how much in legal fees will be dedicated to this process to take on the IRS?

    Heck this is a contradicting bonus happy unethical firm that tanked their investors fraud settlement and cut employee severances so why should they treat the taxman any different or with any greater respect than being asked to attend a government inquiry before being told to. Do they think they can do what ever they want here too?

    Here, this is the resolution your honor, that's my story and I am sticking to it? Good luck.

  • protosphere

    I guess we will know on Tuesday what this means because “Full details of the settlement weren’t made public in a document filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Company spokesman Jay Barta declined to comment. “
    __________________

    http://www.bloomberg.com/apps/news?pid=newsarch…
    September 30, 2009 16:08 EDT
    IRS attorney Jan Geht told Gross that the claim was legitimate and that the issue is too complicated to rush toward an Oct. 13 trial. Gross responded that he would not move the date. The agency asked the U.S. District Court in Wilmington, which oversees the bankruptcy court, to take responsibility for the tax-claim issue away from Gross.

    http://www.bloomberg.com/apps/news?pid=newsarch…
    Last Updated: October 8, 2009 19:11 EDT
    U.S. Bankruptcy Judge Kevin Gross told Nortel and the IRS to prepare for a trial on Oct. 13 so he could decide how much of the claim was legitimate. That trial will be canceled, according to court documents.

    The company said in an agenda for a court hearing next week that it had come to “an interim resolution” that it would detail on Oct. 13.

    Nortel Networks Corp. and U.S. tax officials resolved a $3 billion bill from the Internal Revenue Service, the bankrupt maker of telecommunications equipment said in a court filing.

    the IRS agreed not to try to hold Avaya Inc. responsible for any of Nortel’s unpaid taxes

    Full details of the settlement weren’t made public
    Jay Barta declined to comment.

  • Another_Nortel_Watcher

    Oh Yay! Another deadline to miss!

  • Nortel watcher

    I wonder how many managers are moving themselves and their pals over to NBS to secure a future NT paycheque for themselves.

  • GoProto

    Monday, October 12th is a Holiday here in the U.S. ~ Columbus Day.
    I know that Banks & Govt. institutions are closed.

  • 1Skeptic

    It appears the “interim resolution” only has to do with not holding Avaya responsible for any portion of an IRS settlement.

    http://www.cbc.ca/money/story/2009/10/09/nortel…

  • AcrimoniousAl

    Business Made Simple (and irrational)

    Finally, Nortel proposed an application of the RPSM (Residual Profit Split Mythology) that is simplistic and irrational.

    Docket 1543 Exhibit 8 page 33

  • scoop1985

    Was the settlement “announced”? Did I miss it? Or another missed Nortel deadline?

  • scoop1985

    Was the settlement “announced”? Did I miss it? Or another missed Nortel deadline?

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