$28B of Claims Filed Against Nortel

By Mark Evans | Published: October 29, 2009

An interesting tidbit that I was remiss in highlighting in the Monitor’s 25th report is that 917 claims worth C$28-billion were filed against Nortel and four other business units (Nortel Networks Global Corp., Nortel Networks International Corp., Nortel Networks Ltd. and Nortel Networks Technology Corp.) by the claims bar date of Sept. 30. Another 13 claims worth C$1.4 billion have been filed since the claim bar date.

Screen shot 2009-10-29 at 4.27.44 PM

(Note: These claims include those filed against more than one of the applicants, as well as “placeholder” claims for nominal amounts or amounts subject to further adjustment).

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  • scalppeeler

    28 Billion in Claims.
    So let's assume they get 5 Billion out of their asset sales and real estate.
    That is about 15 cents on the dollar for the preferred creditor.
    In other words best case is 15 cents on the dollar.
    Can you imagine. This is what the big creditors will get.
    What will the ex employees get.
    Looks like Nothing.
    And when will the payouts happen.

  • wasthere

    For me that's a big reason why in a bankruptcy proceeding, employees and pensioners should be in front of all creditors. This would leave all the jackals and vultures showing up, fight upon themselves for the crumbs !

  • ntpurgatory

    Shocking. No other words come to mind. Just shocking…

  • Meridian

    Pardon if i appear dense – but how can the claims really be that high ?

    Things I can wrap my head around would include:

    - outstanding short and long term debt at point of filing,
    - unpaid suppliers at filing,
    - lost severance and pension.
    - forward looking lost pension
    - outstanding taxes (maybe the fake US bogey here ?)
    - claims for broken leases and contracts
    - vultures (errr I mean lawyers)
    - bankruptcy consultants costs
    - restructure costs

    How can this really be $28B — is there double or triple counting against the different Nortel entities maybe ?

    I;sm sure someone can explain this… (please before proto gets to it… )

  • gone2moro

    At this point I'd take a Happy Meal in settlement…..

  • gone2moro

    No wait…….. a Tim Hortons' two donut / coffee combo….

  • headabovewater

    One question I had was with all these claims is the pension fund further at risk or is it fixed now at 69%. I'm debating whether or not to take everything out and stick it in a LIRA.

    Any thoughts?

  • scoop1985

    this amount if about double what Nortel represented, so me-thinks there is a good dose of double counting going on. I can see claims being 20% higher than what Nortel showed….and not all will be granted as actual unsecured debts.

  • wasthere

    Personally I would not pay to much attention at all these claims. Looks like every Dick and Harry of this world are suddenly finding out that Nortel owes them something. Human greed and opportunism at is best !

    If the 28 billion was a real good figure why would Nortel bonds still trade around 58¢ on the dollar as of today ? With an estimate return of 4 to 5 billions on asset sales, these bonds should then trade around 20¢, no ?

  • less

    lol – i got the “Ciena papers” from Epiq today; thats gotta cost some money too

  • less

    Human greed and opportunism at is best !

    Yeah Mike Z left in disgust over that…

  • happy2b

    Pension fund is outside of Nortel, handled by 3rd party, Nortel and creditors can not touch it, but it may drop further or remain the same, demands on a number of factors.
    If I was you I'd pull everything out and stick it into a LIRA, better to have 69%, manage it yourself, than waiting to see what happens to it. Plus you are still entitled to your 29% if it gets topped up during the creditor proceedings.

  • headabovewater

    So here is a theoretical question. If everyone was to withdraw their money to put into a LIRA, would there be enough in the fund to cover it at 69%? My concern is there will be a mad dash to withdraw and there won't be enough $$$ to cover everyone so the last guy to withdraw is left with 0.

  • less

    Maybe 't have advertised its “lights out in the crappers” initiative so loudly after all. Now many are the till grabbing for a, well, chunk of its, uh, epiq savings.

    But again, it was the execs who grabbed and ran and are now demanding more, which I feel has increased the overall tone to a cynical, fevered pitch.

  • less

    If I had 5-10 people building cables for Nortel and they fail to pay, it can effect my immediate ability to do business with others. If can't pay my own people and bills I can't make (good) cables for other customers, either. They shouldn't all have to suffer if Nortel failed to turn off enough crapper lights on time.

    Similarly Nortel employees who did as they were told and banged those precious units out aren't to blame either. Pay them.
    If execs were paid based on merit things might look a little better. And a rare few execs have done that – work for $1 to show some at least some symbolic interest in the welfare of their company. Nortel wasn't one of them.

  • Nortelian

    How would you withdraw everything? Lump sum withdrawals are no longer allowed.

  • Lookahead

    Well, it is easy to separate the debt at the point of Z man came to the reign and when he left Nortel. Then any debt increase during Z man period can be traced down to this guy for the justice, as he promised to the Nortel stackholder and public for his achievement but he obviously lied to all of us.

  • bankrupt_bob

    <<Nortel® – Official Site
    Reliable Support • Proven Products. Learn About the New Nortel.
    Next.Nortel.com>>

    What's the word I'm looking for… bizarre?

  • less

    Your Investment in Nortel is Sound

    Hear how Nortel ingenuity can reduce energy costs by as much as 60%.

    Lemme guess – crapper lights off, earnings restatements

    Compare Nortel energy usage vs. the competition.

    Lemme guess – Cisco is evil

  • linho

    That are the concerns for the current pensioners… too many payouts too many withdraws could result in wound up plan.

  • zeroman

    ouch

  • zeroman

    pull it while you can and file a claim for the rest. 69% could go lower as there is no guarantee. Ontario does not care either so you could be holding an even shorter end of the stick. Get a good investment advisor instead of asking for advise here.

    from your other post withdrawals will leave whoever remains in the fund short. the fund is underfunded. secondly it did not grow or lost money due to 2008 going down 50-60%. the market has creeped up a bit but hardly to pre-2008 levels. thirdly, it depends upon how much money is liquid. I would guess not a lot which could mean selling off portions of the fund at a loss.

    so my 2 cents is pull the plug while you still can.

  • zeroman

    they probably will. who ever is buying the bonds will get shafted if that happens.

  • zeroman

    symbolic as the 41 salary is, it speaks of leadership. at Nortel it is about leechership.

  • headabovewater

    Oh in that case I guess I'll leave it in. I'm trying to do the right thing and to short-change the current pensioners would be bad.

  • 4merEmployee22

    Will the monitor publish the names of claimants ?? ( Individuals or Corporations )

    Would be nice to know!!!

    Who gets what and how much? Simple as that!!! Or are they bound to

    Privacy Protections?

  • 4merEmployee22

    Just Who were these 917 claimants???

    DOES NORTEL REALLY HAVE THAT AMOUNT OF MONEY TO PAY ALL
    THE CLAIMANTS???

    $28 Billion Dollars!!!! Right now! I don't even have $28.00 dollars in my
    wallet! NORTEL NETWORKS STOLE MY RETIREMENT ALLOWANCE!!!!

    To the people involved in the demise of NORTEL NETWORKS:
    Wishing you all an
    advanced “MERRY CHRISTMAS” and an “unHAPPY NEW YEAR TO YOU”

  • pickaxe2

    Well the longer they delay & time moves on the bigger the number will rise…lets reacll theyare still trying to operate so theres more debt being accrued…& who will get t…even if it is cent to the dollar..yep the secured creditor…meanwhile the unsecured will get screwed to sod all!

  • whopperscan

    28 Billion is way way over what they claimed liabilities were for a long time up to chapt 11… another damming comment on Nortel's financial reporting (in)capability.
    Wonder if the board could be held liable for trading while insolvent? that level of debt suggests a case could be made…

  • pickaxe2

    Well the longer they delay & time moves on the bigger the number will rise…lets recall they are still trying to operate so theres more debt being accrued…& who will get it…even if it is cent to the dollar…….yep the secured creditor…meanwhile the unsecured will get screwed to sod all!
    This is one way that delay tactics will work in Nortels benefit & why the Canadaian Judges need to bring this to a head !

  • whopperscan

    28 Billion is way way over what they claimed liabilities were for a long time up to chapt 11… another damming comment on Nortel's financial reporting (in)capability.
    Wonder if the board could be held liable for trading while insolvent? that level of debt suggests a case could be made…

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