U.S. Creditors to Battle Disability Deal

Nortel’s Proposed Incentive Payments Opposed by U.S. Trustee
March 02, 2010, 12:03 AM EST

Nortel Trustee Objects to Proposed Incentive Payments By Edvard Pettersson

March 2 (Bloomberg) -- The U.S. trustee for the Nortel Networks Inc. bankruptcy case objected to a proposed new round of retention and incentive payments for employees of the maker of telephone equipment.

The aggregate payment of $55.6 million to 866 employees over two years under a new incentive plan is “extraordinary,” Acting U.S. Trustee Roberta DeAngelis said in a filing yesterday in U.S. Bankruptcy Court in Wilmington, Delaware. The trustee also objected to a proposal to make milestone payments under existing plans irrespective of the milestone in question occurring.

Nortel employees get screwed again, while management get bonuses for bringing down the company.

It all started with Roth leaving with a glorious payout, instead of an investigation as to how this could occur.

I agree it is very surprising the auction lacked particpants when all other BUs did not. At least Genband has maintained and Samih Elhage of Nortel has reiterated that the great majority of CVAS employees worldwide will be given a job offer. Good luck to you. Regardless of the salary amount, be glad you have an offer to stay.

I find it shocking that no other companies were interested in CVAS and did not enter a bid by the deadline yesterday.

NORTEL CVAS SOLD THIS MORNING TO GENBAND...THERE WILL BE NO AUCTION...SEE THESE TWO LINKS

http://www.marketwire.com/press-release/Nortel-...

http://finance.yahoo.com/news/GENBAND-Selected-...

In Ontario, the mean spirited Harris government denied eying cutting disabled benefits, as it slashed social assistance to the most disadvantaged while it sold public assets... needless to say he is gone but the cut injections have not been re established

Nortel also cut pensions and severances...they too are gone needless to say...

Their impact and what can be done after these catastrophes should open eyes... How many more victims will our diligent lawmakers allow before allocating an equal amount of resources towards doing the right thing in this balance.

So mike harris was Genghis Khan to un-established and established Canadians of Contribution cutting social assistance and welfare. There were no refugee payouts when Harris was in charge. You have the opposite with McGuinty. Welfare, Refugee payouts, social assistance up the ying yang including housing and subsidies. McGuinty brings in wave upon wave of immigrants regardless if they contribute or not and sets them up for life. Perhaps Harris was a little harsh on one end. But McGuinty is extremely harsh on the opposite end of the spectrum rewarding Canadians of Convenience at the taxpayers expense. Don't know about but I'll take the Harris model over that.

Check out this former Nortel'er:
http://online.wsj.com/video/engineer-starts-sec...

26 years and...bye bye:
http://hk.linkedin.com/in/evangelo

A happy artist, good for him!
Note that he also acquired a Masters degree in Fine Art =)

He admits he isn't rich but happier, and isn't our very time life's most precious possession.

Group Hug Tech heads! There is life after Nortel after all. I am surprised the Wall St. Journal posted it, good for them too.

I wonder if he was one of the lucky ones who got severance pay.
Most were laid off without a dime.

This is the auction week for CVAS. Does anybody know if there are bidders yet?

The deadline for registering as a qualified bidder is Tuesday the 23rd - auction is scheduled for Thursday the 25th. There hasn't been an announcement with the list of qualified bidders made for any of the other auctions, so don't expect one here either. If there aren't any qualified bidders beyond Genband by tomorrow, then Nortel will postpone the CVAS auction until there are...

Nortel mgmt says if the auction occurs on schedule Thursday they will announce the winner the following Monday (March 1st). Hopefully the winner will be proud enough of their purchase to make an announcement of their own sooner. We'll see!

Does anyone know how likely there will be no other bidders? If the auction is postponed, it just keeps the CVAS employees in limbo. Many of us felt certain there would be other bidders for the business.

No idea - there have been rumors of interest from lots of parties. Whether or not they show up for the auction and bid remains to be seen.

But CVAS represents such a unique opportunity - the undisputed world leader in CVoIP on the block for a fraction of its yearly revenue, which has grown even during Nortel's bankruptcy - that I would be surprised if no one besides Genband bid. But then I was surprised that they took so long to set up a stalking horse bid for CVAS, and I was surprised at the rock-bottom price being offered, so I'm obviously not an insider (no KEIP/KERP bonus for me!)...

genband itself makes $145M in revenue. so I dont think they can survive someone bigger coming in. most of the money is coming from their investor.

problem is not too many will jump on this unit. hope it does not get postponed.

Why surprised?
Where's the earnings on this increased revenue?

Funding the executive bonuses, of course...

I am sure there are bidders but it will probably be kept a secret.

Nortel hasn't announced any of the biddres for any of the auctions given the confidentiality agreements in place, other than the Stalking Horse bidder. That's not about to change.

NoTell secrets?
Have they proven to be honest, reliable, or credible?

You mean other than Genband?

We suspect HP are in the running.

HP? That would be an interesting move.

I could see NSN, Sonus and maybe even Cisco enter the mix, but never considered HP before for CVAS.

Cisco no way. sonus maybe. NSN not. HP could if they are building on top of 3Com but hard to believe they would. this is also old legacy stuff.

my money is on Genband taking this for a steal.

sticky developments...


http://www.theglobeandmail.com/report-on-busine...

From Sunday's Globe and Mail Published on Sunday, Feb. 21, 2010 12:32AM EST Last updated on Sunday, Feb. 21, 2010 2:56AM EST

Britain's pension regulator has muscled in on the unwinding of Nortel Networks Corp., hoping to recoup an immense shortfall in a bold and largely untested legal gamble in a Canadian courtroom.

uncertain how or whether the “regulator's writ” would extend into Canadian court proceedings.

“There are no precedents even within the English legal system,” Mr. Ralfe said. “The real issue is whether the U.K. pension regulator will be accepted by the Canadian courts

U.K. Pensions Regulator has filed a $3.4-billion claim
where there are more than 43,000 Nortel pensioners.

it's clear that Nortel's restructuring team and the court-appointed monitor are doing everything they can to push back against the claim.It may “unfairly prejudice” how funds are distributed among creditors, they wrote.provide insufficient notice to the CCAA Debtors,in order to protect the interests of the general body of creditors and stakeholders,all of whom have important interests in the successful implementation of Nortel's transitional activities.”

What they're going to do, of course, is take money away from Nortel's Canadian pensioners to help pay their bills in the U.K.,” Mr. Sproule said. “That's troublesome and highly unfair.”In Britain, retired Nortel workers already receive benefits under the Pension Protection Fund In the U.S., retirees have continued to receive benefits under the federal Pension Benefit Guaranty Corp.

If the Brits and the U.S. are squaring off, will the yanks host a Tea Party protest to fend off the imperialists?

"The big U.S. creditors are worried that a campaign by former Nortel employees could change the balance of power.

the deal ($57-million Canadian sunset deal for former Nortel employees) was structured by Nortel and major creditors

The creditors oppose a provision which opens the door to former Canadian employees getting a bigger share of Nortel assets if the federal government changes insolvency laws.

A key provision, however, allows ex-employees to open the issue if Canadian insolvency laws are changed.

"There is no question that certain aspects of the settlement agreement are being disputed by the main creditor groups; namely the bondholders and the Unsecured Creditors Committee.

"In particular, these groups take exception to (a) clause ... which addressed the possibility of future changes to the Bankruptcy and Insolvency Act."

At present, virtually all creditors are unsecured. Nortel assets are likely to cover only 50 per cent to 70 per cent of claims.

If the Nortel employee groups are successful, their claims would get a bigger slice of the pie and other creditors would get less.

They also are unhappy that the deal prevents them from suing Nortel directors and executives

With the Ontario government promising to top up the first $1,000 of monthly Ontario Nortel pensioner incomes, the Ontario government has an obligation of about $200 million in long-term support."

______________________________________________


Slippery to the very end...

Government pays their creditors, indirectly through UIC since they cut severances, or the pensions shortfall these very creditors neglected in their bonds application listing them as a mere footnote, a loophole closed right after as Nortel paid bonuses for financiaa innovation or to the death of a fly.

Nortel and their big business pals who lent them the money to begin with see the writing on the wall if federal bankruptcy laws are changed towards an ethical resolve to protect employees, so what do they do... they print ultimatum contracts for employees to sign in advance of this.

To top it off, they print bonuses and ask not to be sued.

What a riot to the crooked end... beyond belief, so be seen....

All after they kept the fraud bonuses before the largest fraud settlement in Canada as Manley defends Dunn against criminal charges with so many still there.

New puppets and pals not at the crime scene even get golden transfers like Hack... how endless do these legal theatrics get with their reluctance to chase past officers amid ongoing exuberant pay practices

They increase lawsuit insurance to a whopping $300M as they cut severances, pensions, trade options while employees are ultimatumed not unlike their shareholders who got 1/3rd of initial settlement to mark to markey profit revisions klilling triple profits, must sign not to sue them.

How can justice be influenced by social, political, and economic powers to such a degree in a democratic country?

They should cover the employees and what the defrauded shareholders lost with what is left pending criminal trials outcome as reimbursed proceeds of crime as well as returning fraud bonuses. Never mind the far from destitute big business pals who took no risk to became a prioritized creditor AFTER the existing shareholders and employees position. A good precedent to set against staging tyranny through legal loopholes.

you lost me after the 25th paragraph...please post a condensed summary please.

Quit begging, it strikes me as insincere. The first 10 were direct quotes from the media.

The balance was to entertain people who can read. Condense it yourself, what do I look like, an employee who can only count? =)

The real issue here is one of jurisdiction and precedence for bankruptcy claim status. The US Creditors do not want their position changed through possible future changes in Canadian Bankruptcy law in the future. That is straight forward to understand since proceedings have been taking place for more than a year.

These issues of jurisdiction and precedence are going to get worse as noted in a new story today in the Ottawa Citizen. British Pension Regulators are about to start a battle over a $3.2 Billion Pension deficit.
http://www.ottawacitizen.com/business/British+f...

I would personally like to see pensioners and former employee get preferred status but I just don't know how that can happen when there are so many different jurisdictions involved.

WTF. Are they Serious. Are you kidding me.
Tell the Brits to take a short walk off a long plank.
Canada and the U.S are brothers, cousins and neighbours tied at the hip.
We live beside each other. Our cultures and lifestyles are inextricably binded
economincally and culturally. Nortel was and is mostly a North American
entity. It was Canadian owned and started in Canada.
Nobody gives a **** about the old tie ins to BNR and British engineering
that helped to design and build nortel from the start. Water under the bridge.
What have you done for me lately. It was a CANADIAN company.
This should be a slam dunk for E&Y. The Brits have no leg to stand on.
Its crying time at the boy george tea and crumpet cafe.
Did you read how much annual salary the British pension covers. 48,000 annually
as opposed to 12,000 annually in ontario by McDicky.
What a joke. When are canadians going to stop being so apologetic and start taking instead of giving. Just watch the olympics. Smiling when finishing fourth or fifth instead of kicking a table over.

Don't worry too much about the Britich workers. Their Government's 'Pension Protection Fund' guarantees them all up to 90% of their pension. If this action fails those pensioners will still basically be OK.

You can't blame them for trying to get some of this cash back though. All the profits from Nortel worldwide got sent back to Canada for all those years. If they'd kept up payments in Britain as they shodul have instead of sending it back to the fat boys back home this woudln't have happened.

p.s. this isn't the biggest pension deficit around. BT in the UK are in the red by NINE billion pounds.

Well no, all of the profits from Nortel world wide were not sent back to Canada. Indeed they were moved out to other countries to avoid North American taxes. Hence the IRS filing. Had they been sent back to Canada then Nortel Canada would not have needed cash infusions on a regular basis from Nortel US. Basically, regardless of the Nortel press statements, Nortel never did follow GAAP....it wasn't to their advantage to act like a normal corporation.

You are off topic.

Scalppeeler...how can I be off topic if I'm saying what Nortel was really doing with the money? The previous post said it all went back to Canada which is not true. The BU were all headquartered in the US. True, they farmed money out to various locations (e.g. for over priced services) to avoid the IRS. The money stopped coming back to Canada probably 25 years ago.

Canadians will continue to get money from the americans.
No brainer. The americans will always be there for the Canadians. They have to be. By off topic I guess I meant to say your points are irrelevant. The final result is all that matters. Same for basically everything in life.

No brainer is right.

Like Canada honors UK without litigation unlike France and Germany.

Forget the wishul hand outs or that Canada will be at par.

Who can trust what they even owe, analysts who go by what Nortel states, or who advocated hold from 50 to 3 cents a share adjusted?

Nortel must also pay back Nortel U.S. for the loans they received which is a biggy.

Nortell may have dodged the US tax man but Canada is being hit for UK pensions now... what will be left... yaya I know, you hope they get squat here too.

Gee.
Whaddya know. I was right again as usual.
The crumpeters come up empty again.
Must be the post olympic North American Gold
Rush feel good story.
Remember the Brits and Ruskies bad mouthed
the canucks at the olympics because they
themselves were so pathetic and were full of sour grapes.

I hope they get dick all.
Seems like an open and shut case for E&Y.

E&Y are squirming trying to muster every excuse in the book. They are peaking trying to dismiss it on federal bankruptcy laws that circumvented provincial ones where they are headquartered.

There are also 43,000 UK pensioners, a multiple of here.

Developments should prove extraordinarily interesting and hardly a slam dunk as they liquidate assets the employees created ...but are denied severances with ultimatum settlements on pensions to boot for prioritized creditors that more recently lent them money than the time these employees have been around.

The Brits are no slouches to civilly presenting no better case of why laws are written while Nortel remains the poster boy for violating them. They had top engineers too. I would argue by far, bar none, hands down to any on this globe. Their legal people are equally diligent and brilliant to rival any amount of legals fees that would otherwise rewrite the laws of physics. David would win over Goliath here without a settlement I suspect, contrary to a slam dunk by the liquidating bonus happy fraud dog that seeks to sweep its employees under the rug with the rest of its skeletons.

The courts can't scam internationally as they do with the domestic sheeple to protect big business creditors. There are laws and arguments to be addressed and hardly weighed in my view.

It is also their peons they backstab who created the patents they sell in these assets yet they do not benefit from the company's promises as do creditors.

Nortel may have done more international damage than many are aware. Should the UK lose, I question how it would impact other Canadian companies operating abroad and any laws that may be devised to protect pensions in the future to hinder operations and competitiveness.

Not a slam dunk yet... wait for it... only kangaroo courts will refuse to do the right thing and so far there is a great chance this too can happen yet again in light of the enormous liberties they enjoy through previously accepted arguments brought forth by thousands of lawyers burning the midnight oil defying their conscience. =)

Nortel deserves to be drilled a new orifice for once in light of a fraction of stunts they have pulled. Hopefully a foreign body can do it better than the domestic puppets catering to big business while neglecting the sheeple /their peons that created the very assets they liquidate as fast they can in favor of big business creditors and ongoing bonuses.

Smart money in Vegas is on the tea-crumpet nigellians losing big time on this one. Don't start crying.

"Smart money" has traditionally been an oxymoron when it comes to Nortell.

In this case, ya, Nortell has a home advantage with the rest of the pirates they sleep with tripping over their feet to find excuses not to pay.

On the other hand, don't you cry if the redcoats walk off with the wedding cake and punch bowl that Nortell keeps tossing turds in =) They may have escaped the $3 billion dollar question with the taxman but that was with a devil they know on home turf =)

For more about the Nortel UK Pensions position this website has good info www.nortelpensions.com

How long is a "considerable period of time"?

Quotes:

The PPF have today filed claims in the US and Canadian courts for an amount up to the Section 75 deficit in the Plan which is currently estimated to be approximately £2.1Bn as at 13 January 2009.

As you will know, a similar claim has already been made by the PPF against NNUK and there are also further claims against Nortel Networks Ltd. in Canada in respect of guarantees held by the Trustee.

We will keep members informed of the progress of the foregoing but it is likely to take a considerable period of time before there is a conclusion.

During the process the costs incurred by the Plan and the potential recoveries will be kept under constant review.

It is not possible to comment on the Plan’s likely share of these sums until such time as: (a) agreement is reached on how these sums are to be allocated between the estates of the various Nortel entities worldwide (the sums will be held in ‘escrow’ until such agreement); and (b) the Plan's claims in the insolvencies of the relevant Nortel entities are determined. This process may not be concluded for a considerable period of time.

'Dem cripplefolk and der pensioners be on the out looking in!

System...cow...teet...milk flows...country clubbers only.

KEIPers = red carpet

Rest of Nortel = pile of maggots

KEIPers = red carpet

Rest of Nortel = pile of maggots
---------
re
Are you talking about Nortel culture?
Yes, it has been that culture which brings Nortel to a stop.
There is still that huge inertia of frauds and deceptions that causes them to ask for another pool of money for bonuses.
Bonuses for what?
How unprofitable company /10 years in a row or more/ can pay billions in bonuses?
/in these 10 years as total/
Total disregard for human pain, pain of employees losing jobs and severance payments, pain of pensioners defrauded $3 bill from their Pension Plan, pain of investors losing all the investment, ... the list of harm Nortel did and is still planing to do in the future is endless.
As strange as it is, as it sounds, the key to change all of this is in F Dunn's hands now. He is the one who can change Nortel culture and change Canada for better country. It is his chance for rehabilitation. It is his time to show how it is done in Canada, how, who, why?

Dunn is represented by Manley's law firm, something no media outlet has yet posted our exposing this right here in this blog.

We also bring to light the plea bargained board, their reluctance to chase past officers, voting to keep fraud bonuses, tanking the ultimatum settlement with revisions, exorbitance to looting the corpse, insider CFOs to Binning where they didn't know before forced inquiry, etc... it is endless and we can fill pages but the obvious seems to fall on deaf ears in legal circles.

Hopefully one of the largest frauds on earth will be better exposed in the U.S. courts unlike Canada which rewards than punishes what they call financial irregularities or accounting malfeasance than outright fraud, largest fraud in Canada, as they kill shareholders and employees for big business with OSC blessings and government figureheads defending them.

MIke Z is a gimp based on performance but he did okay, welfare-wise.

either it is the money or a ruling on priority. means one thing which is more moolah on lawyers and consultants. they must be salivating and clicking their fangs.

Bizarro World.
Ex Nortel Employee Pensioners Versus Ex Nortel Non Pensioned Employees.
Tug of war. With the disabled representing the water/mud mix zone betwixt the two.
I believe the provision will be overturned. The smart lawyers for the big
creditors noticed it and will likely get it removed.
Ex non pensioned employees are getting 3,000 bucks as an advance on what they might get. Any hope the ex employees have of being at the top of the priority
queue are only predicated by potential changes to the insolvency act laws
which could be years away if at all. The ex employee group led by Diane
are hoping to keep the provision so they can get their 3k and step to the front
of the line if insolvency laws are changed. But changes would not entitle the ex
employees to any retroactive freebies or would it?
So as Mark says in his salvo you could say the disability are the ones who will
get the short end of the stick. I don't see that happening. I see the ruling staying as it is for pensioners and the disabled but I see ex-employees losing that provision.
Depends how good the lawyers are.