Bankruptcy Protection Ad Nauseum

By Mark Evans | Published: April 17, 2010

Who knew it could take so long to completely dismantle a company. Even though Nortel has been in bankruptcy protection since January, 2009, it has requested and received approval to extend its protection until July 22.

Even though Nortel has raised more than $3-billion from selling assets, it still has $4.5-billion of long-term debt, as well as obligations to pensioners, suppliers, etc. that will likely never be covered.

Nortel’s remaining assets include the 50% +1 stake in the Nortel-LG joint venture, and more than 3,000 patents.

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  • wasthere

    This company is going down the drain since 2001. The only thing Nortel has been able to do in all these years, is adding more tubing before they reach the sewage.

  • bankrupt_bob

    They should have employed Roto-Rooter instead of all the other idiots that ran this company down the drain!

  • Lookahead

    do not take 4.5 Billion creditors obligations too seriously, even Mike Zero claimed 12 Millions against Nortel. Those 4.5 billions claims mostly winding down to a few cents from a dollar.

  • TongueInCheek

    The key number on the Balance Sheet to consider is the “Liabilities Subject To Compromise” which are the total liabilities that are governed through the Bankruptcy Protection process. The value of these liabilities is $7.358 Billion USD. There are other liabilities in the business that are not part of the Bankruptcy Protection process and are assumed by the current operations.

    The extension is procedural and a non-event.

  • KayToo

    Where is the company at now. You would think it would have a skeleton staff by now and would be seeing black ink from the patents and the LG, enough even to service a long term debt if they wanted.

  • NortelEngineer

    Any Idea about MSS.

    It is still with Nortel. What is the future of MSS ?

  • protosphere

    What is the LG stake worth? Even LG didn't take Nortel's share with their first right of refusal.

    What are the rapidly depreciating patents worth, as analysts reiterate how they better sell them fast as they are expiring.

    Not too much left to cover their debt now.

    Interesting to see them extend demise while transferring key people like green Hack. Even the buyers of their units do not seem to be doing that great and employing the same desperate policies of buying revenues at the expense of earnings, for what, a larger market of nothing profitable than looking bigger…

  • scalppeeler

    MSS is rumoured to be going up for Auction in the summer.
    There have been rumours about maybe half a dozen interested parties.
    I am sure employees are hoping Alacatel or Eric buy it.
    MSS is a different beast. It is basically legacy products that have been running
    for years as part of installed bases. China became the new home for MSS, but there
    are still connections to North America. I believe the remnants of the R&D staff along
    with worldwide global support is still in North America. I don't know what kind of
    revenue stream MSS generates since it mainly a multiservice ATM switch but
    it is still officially part of what is left of Nortel.

  • wasthere

    This robbery as no end ; some suckers are still getting millions out of the carcass !

    http://www.timescolonist.com/business/Nortel+wa…

  • scalppeeler

    Looking at it as Yoda would, I would have to classify them as Opportunists, not suckers in any sense of the word. The Nortel Kling-ons ain't stupido.
    The know by asking for 4 million they are giving the perception that
    the guy is worth it and his skills are badly needed.
    In reality even if he is worth 4 cents, which is entirely plausible
    it has always been about perception at Nortel, not actually what you did
    or were capable of doing. Be honest if you could pull millions out of the rabbit
    hole in wonderland wouldn't you? I'd be on it like a dirty shirt.
    Isn't that is what capitalism is all about.
    Some nice revelations at Goldman Sachs yesterday.

  • ltd_sleeper

    So the liabilities that are subject to compromise is 7.358B? What is the corresponding amount available. I know that there is ~6B but I think there are liabilities that are not subject to compromise, if you were trying to come up with a cents on the dollar estamate.

  • closeshave

    I'd even settle for the one-time $3k none of us Nortel invalids are getting because, uh, Z feels our pain, and stuff.

  • netasa

    How do you forgetting Netas?

  • wasthere

    As far as I am concerned, I see nobody who should be worth millions and especially if you were part of these incompetent managers who did bring down this company to zero. You should have the decency to take the hit as the creditors, shareholders and fired employees with no severance did. Nortel was full of average managers paid like if they were superstars !

  • wasthere

    Netas !!! At least here's one Nortel investment that didn't go down the drain !

    http://investing.businessweek.com/research/stoc…

  • legalrobbery

    Amen! All of these criminals (current and past Nortel Executives) should be hauled off to San Quentin for the rest of there lives for there lack of leadership and contribution of corruption. I want those bonuses back and distributed to the creditors. Why didn't the SEC step in when Nortel declared bankruptcy? As Nortel was pumping lies of innovation and rebuilding, the hooligans were selling and cashing checks. Now they call it retention bonuses. (Unbelievable!)

  • scalppeeler

    Get use to it.
    Nothing is going to change.
    Shoulda Coulda Woulda.
    It's a great situation for opportunists and like the man
    said below average managers who think they are superstars.
    Nothing lasts forever though.

  • protosphere

    they made more than neurosurgeons for heavens sake and for what?

    even green people getting paid exorbitantly with a poor track record got transferred…

    http://www.itworldcanada.com/blogs/cdn/2009/11/…

    Nortel bonuses are nothing short of shameful
    Posted Nov 27 2009, 12:28 AM by Paolo Del Nibletto

    Usually when an executive gets a bonus it's for a job well done.
    Not in the case of Nortel executives. In their case, they get a big fat bonus for a job done poorly.

    I only hope that this is the last we hear of Nortel's sad tale or corporate greed. This company was once a jewel of Canadian business, but now it will be referenced with likes of Bre-X.

  • legalrobbery

    You are right. Nothing lasts forever. One day every contributor…every silent voice…every and all opposition will answer for what they have done.

  • legalrobbery

    Indeed…. that article hit it right on the head.

  • Normie

    MSS must surely be a good cash cow – there are many large installs still in service and it is a part of the CS2K solution (using the VSP cards in the MGW/PVG). Support contracts and spares much be a good earner. I believe 1st line support is now out of Turkey, with 2nd/3rd line in NA. I think that PLM is still in Ottawa.

    The company that I work for has a 7k/15k install base of over 600 nodes. For those MSS engineers that use CLImanager – this was moved into CVAS and is now part of Genband.

  • bankrupt_bob

    <<Nortel CVAS Continues its Reign as the #1 Supplier in Global Carrier VoIP and Softswitch Markets>>

    Oh, the irony!

  • wasthere

    Carrier VoIP and Application Solutions (CVAS) today announced that Technology Marketing Corporation (TMC®) has named Nortel CVAS' Adaptive Unified Communications (UC) solution as a recipient of its 2009 Unified Communications magazine Product of the Year Award.

    http://it.tmcnet.com/news/2010/04/19/4735860.htm

    Yep ! Good products, badly and costly managed by a big structure of suckers, will go bankrupt !

    This was the way ……… the path to bankruptcy.

  • scalppeeler

    The only thing Nortel ever had that was referred to as a cash cow was its wireless portfolio. CDMA etc. For many years it was the only LOB that made well over a billion per year basically keeping the business alive until Bankruptcy protection was declared. MSS is a cash cow but on a much smaller scale and the MSS technology for the most part is old and updated. ATM Multiservice. Of course the installed base for passport is huge and as long as a customer keeps the gear it generates revenue but for sure that revenue stream is shrinking. The installed base is for sure the Cash Cow part of the equation. It is not new sales.

  • fersap

    I do not know who are waiting, to commit suicide. Because they are killing themselves.So that there is a way to pay so many people waiting for their pensions.
    Because the executives have already taken their incredible bond.

  • happy2b

    Another fiscal quarter, another round of bonus for all my executive friends!
    This party is great Dolittle, lets keep it going as long as possibly!
    I highly agree with my executive friends, party on!

  • whopperscan

    No surprise at all that they are dragging it out so unnecessarily. Remember precisely who “they” are. They are administrators and lawyers. They get paid in large fees, based on activity and TIME. They are rewarded by dragging it out as long as possible. Administrators are never in it on anyone's interests but their own financial one. They don't give a toss about retirees or staff, or creditors – quite the opposite, they eat up the cash they use to create fees.
    Prediction: they'll drag this out to at least the end of this year minimum, and no surprise from me if they engineer a way to keep sucking fees for another 2 years.

  • 4merEmployee22

    OPPORTUNISM is the proper term for this fiasco.
    Oh yeh! The smell of MONEY alright!
    E & Y Inc., the MONITOR will be getting over $5 million dollars by the looks of it
    while it is being drag on longer! What else?

    Executhieves are being paid like movie stars!!!

  • 4merEmployee22

    OPPORTUNISM is the proper term for this fiasco.
    Oh yeh! The smell of MONEY alright!
    E & Y Inc., the MONITOR will be getting over $5 million dollars by the looks of it
    while it is being drag on longer! What else?

    Executhieves are being paid like movie stars!!!

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