All About Nortel Starts to Wind Down

I'm not a bankruptcy lawyer, but my understanding is that Nortel has defaulted on the interest payments due to bondholders. The bonds mature in the year 2011. It is in the year 2011 that Nortel must pay full value for the bonds which include principal & accrued interest!!

Nortel has not defaulted on the huge debt owed in 2011 only the interest payments. Right now, NT only needs to pay interest on those bonds and other minor liabilities. That’s why it is in “restructure” mode.

Theoretically, because Nortel has cash to pay off the interest coupons on the debt immediately, NT can live until at least 2011.

However, the time elapsed for missing dividend payments on the preferred shares will be 2 years this November. After 2 years have elapsed without paying a dividend on those shares, it creates another liability to the preferred shareholders for missed dividends which will then dilute bondholders return.

It would be unfair to Preferred shareholders if the bondholder request the court force liquidation now before the bonds mature. But that’s for the courts to decide.

Either a deal is cut before November OR Nortel is forced to liquidate in 2011.

The only deal possible is a Holding Company where bondholders get an equity stake.

Bottom line, Nortel may not fold until 2011.

Mark, my bet is AAN won't fold as soon as you think. CHEERS.

Mark, thanks for providing a forum that quite frankly provided more useful and accurate information than we got from within the company.

Good job Mark

Duke grads are only good for passing the ball.

Thank Fukkin God !

This blog should have been dead long ago !

BTW – How about ” All About Avaya” ?!

Trust me – LOTS of stories there !!!!!!!

MC

Oh oh… will Hackney attend?
=)

The campus has been renamed “Carling Place” and its new sign bears the names of three companies that bought pieces of the dwindling former tech giant — Ciena, Ericsson and Avaya.

haha – the word “carling” could perhaps become a slang term for getting ripped-off, robbed, and dying in the prime of life as yer darling leaves you for greener pastures.

Or, even better, the capital city of a wholly “new” country, as this Story Commenter opined:

BitterPeter wrote:”Fitted place to move in a museum of civilization. I mean civilization as it used to be in a last century, since we are already past the ability to make anything that will be remembered at all. We are just recycling all what happened in the past, including history.”

How about “Carling, New Z-land”. Or “New New Z-land”. Or “Same Old Z-Land”. Or just plain “Z-Land”.
Last letter of the alphabet, last place you'll find work

Yogi Berra had it right, a long time ago:
“You can observe a lot by watching.”
“We make too many wrong mistakes.”
“It ain't over 'til it's over.”
“The future ain't what it used to be. “
“It's like déjà vu all over again.”
“I want to thank you for making this day necessary.”

Ahhh, NBS the landlord? Do they own the Carling real estate? If so will they sell it to ??? or use property management as a reason to remain in business, at least for a number of more years? The fact that the property has been leased should mean all involved get a bonus!

Rumour has it one of the vacated labs will become a new assembly line for green bins since the citizens of ottawa love them so much.
Another lab is going to be a new “swearing in” lab for new immigrants since there are so many coming into Ontario they are having trouble staging the coronation events.
A third lab I believe is slated for ESL and French language training.
I believe the final vacated lab may be a new home for burned out CJOH. The local ottawa news station.
Don't they need a new home?

Long after the vultures picked the eyes and heart out of the Nortel carcass, Mark Evans kept blogging.

As the world's biggest new metaphor of the 2000's collided head-on with an iceberg, Mark Evans took notes as she slowly capsized.

Years after the TV stations packed up and sent their satellite trucks to Michael Jackson's house instead, Mark Evans stayed behind, asking inquisitive questions that couldn't be answered with party-line canned PR.

The music is over and the lonely janitor has swept the last bit of dust from an empty auditorium.

We will never know if it boiled down to incompetence or insanity, or maybe both, but Mark let us both grit our teeth and laugh at the successive bungling that the Dunn/Roth/Owens/Zafirovski regimes executed as they sequentially reduced a corporate giant into junkyard parts.

Thank you for your posts, Mark. Hats off
Horse.

Back in 2003, internally, we always said, all that would be left of Nortel when this mess was over was a server to hold the patent docs and security guard to watch it. Guess we where right. Except, the security guard will be some outsourced guy, and the server will be lease expired, and crushed along with the patents.

We done Mark, great Blog.

I am sure you will remain on Zeroman and the the Stranglers Christmas card list for many years to home.

This blog has relevance as a history lesson or case study for future generations / media or business students in the role of the web in capturing and recording important events during the demise of a once great company, and public opinion regarding the same. I hope you leave it in place for many years to come so Mike, Joel and the gang (& maybe those that consider employing them) can remember their roles in this awful travesty.

Mark,

First time commenter, but I wanted to sincerely thank you for this blog. My interest was purely professional, as I run Nortel telephony systems for my employer. For just about all of 2009, visiting this blog was the very first thing I'd check in the morning. Your reporting on the downfall of Nortel, the bankruptcy and auction process for Enterprise, and your links to other articles and sources throughout the web enabled me to really stay on top of the situation and provide regular updates to my management team. That team would tend to panic, listen to rumors, and throw wild speculations around, and I was always able to keep them grounded in reality thank in no small part to your efforts here. This blog has been a tremendous resource to me.

Thank you again, and good luck in 2010 and beyond.

–B

Nortel started winding down in 2001. Now 2010 and still some assets left on the table and guys paid big bucks plus bonuses to run them. This blog can wind down but if it still wants to follow Nortel …… ain't dead yet !

In related (?) news:

Net neutrality is the idea that all traffic on the Internet should be treated equally and – more to the point – should come at the same price. Right now, for instance, you don't have to pay more to watch a YouTube video than you do to check your email, even though the YouTube video eats up more bandwidth and, in theory, costs your ISP more for you to watch.

Net neutrality proponents call this extortion.

http://news.yahoo.com/s/ytech_wguy/20100407/tc_…

Doesn't this call for one last “Nortel Downfall” video?

I wish I knew the winding down had began in 2001 just as I started pumping cash into NT stock.

This statement is not true, nobody was winding up the business, what happened was related to greed, misfortune, ineptness and short term vision of a few privileged idiots who couldn't see further the next quarter paycheck.

And of course incompetence, but what does one expect when you get a few guys who ran a light bulb business (one with a serious Anger Mgmt. problem), a dodgy accountant a submarine captain and expect them to transform one of the worlds largest telecoms companies during a difficult trading period.

In 2001, after the burst of the tech bubble and the drastic collapse in Nortel's sale, John Roth was visiting sites with this message : ''Good times are over, we need to make sure that what we spend in research in development as a profitable future, we need to stop investing millions where we have very little chance of making money. In fact, it was the start of : let's focus on what we have a chance of being a leader in the industry. Of course, none of the LOB directors wanted to sale his chapel, so they end up bursting all together !

Another reason why Nortel ain't dead yet : to many suckers are still after the carcass.

http://www.ottawacitizen.com/business/Speedy+re…

An Enron aftermath Canadian style, Nortel dies with too few fall guys.

Nortel never started to die in 2001 at all, even though they blew over 20 bill on failed acquisitions. Fears of insolvency back then surfaced only due to their rate of decline at that time.

In 2003/4 they seemingly rebound announcing great orders almost daily like Orange, Verizon, etc., This was paired with a stunning turnaround to the tune of a whopping $750M profit (that was false and written down slowly to zero to lessen the shock with revisions after revisions and delayed repair).

Trading at a 47X P/E as the largest traded stock the profits were false. It was a lie to steal, theft for bonuses, fraud by the far from destitute pigs at the trough. The dream team who approved this plea bargained out. They diluted hundreds of millions of shares under the oxymoron to to keep good people they said, and they just kept paying bonuses after an ultimatum settlement where they kept the fraud bonuses… extraordinary bonuses all along…

After the fraud, the orders stopped. They stalled in silence delaying discovery but this fraud was really their downfall. Amazing anyone extended greater liberties as they kept it up under the guise of recovery.

These loophole and ultimatum artists even made the U.S. bank bonuses after the meltdown look like choirboys by paying bonuses while chopping severances.

They even went on to desperately printing paper that gets paid first circumventing pension loopholes while they rewarded financial innovation, Binning on board after so many insider only CFOs. Manley's law firm defends Dunn, etc., It was too obvious and endless and we can fill pages with beyond belief.

Only the fraud trials remain we hear so little about (so far) and this in my view was their greatest reason for collapse, the very fraud, theft for lies, bonuses at employees and shareholders expense who's life savings supported them.

I hope we hear more from the Department of Justice on this one in the not too distant future as fraud haven Canada and the OSC fox looking after the chicken coup is as toothless as any government inquisition that sees these ultimatum artists liquidate the next day hiding behind federal laws when provincial ones don't suit them. …endless

This will never go away with too many, although the company has. A Canadian joke on steroids. The incompetence or corruption must stop at some point otherwise thew little guy is increasingly doomed by the decisions of those they elected. At least Harper is doing all the right things amid Mike Z and Mulrooney's hot seat template testimonies, with Bells on, and can we even trust out attorney generals for heavens sakes? Can they do what ever they want too!

As bad as Nortel Directors, Executives and Managers have performed particularly over the last decade, even their escapades pale in comparison to the tragedy and destruction Premier Dalton McGuinty has wrought open and continues to wreak against Ontario. Some of his lowlights include the E-Health Scandal, out of control hydro rates and the smart meter, the recently announced 8 billion investment in green power which will actually cost ontarions even more for energy than they are paying now, runaway overpayment for refugees and welfare, scandalous over zealousness with bilingual language re-inforcement, lack of guts (unlike Quebec) to inform new citizens that they need to follow established canadian customs and rules or not be served by the government, hospital closures and staff layoffs. The list goes on and on. Truly disgusting in mammoth proportions.

…and you guys/gals thought y2k was a non-event… ;>)

Ciena is on a roll. Thank you Nortel !

http://notablecalls.blogspot.com/2010/04/ciena-…

Not surprising.
They still have to divest/auction off their LG and MSS portfolios.
After that NBS will likely continue suppoting divestitures of all
that is gone and continues to go.
After that they have to finalize all the possible real estate transactions.
Don't be surprised to see an extension into July 2011.