According to the Toronto Star, Justice Frank Marrocco is scheduled to preside Thursday over motions, including those by the defence, in an open-court hearing at the Superior Court of Justice of Ontario. A trial before the justice starts on Jan.16.

The legal proceedings are focused on how Dunn, Nortel’s ex-CEO, Beatty (the ex-CFO) and Gollogy, the ex-controller, allegedly cooked the books to trigger large bonuses.

The charges against them includes two counts of fraud affecting a public market, two counts of falsifying books and documents and three counts of issuing a materially wrong prospectus.

With a mountain of documentation already filed, it will be fascinating to see if what really happened at Nortel emerges.

You have to remember that Nortel was scrambling to recover following the crash of the dot-com and telecom markets in 2001. After Dunn replaced John Roth as CEO, Nortel made a remarkable return to profitability.

But things went pear-shaped in March 2004 when Nortel announced it would delay filing audited financial statements for the preceding year.

After Dunn was fired “with cause”, he was replaced by ex-U.S. Navy Admiral Bill Owens despite his lack of telecom experience. Owens was subsequently replaced by Mike Zafirovski, who led the company down the path into bankruptcy protection and a massive asset sale.

While it’s left to be seen whether Dunn, Beatty and Gollogy will be found guilty, the bigger story remains the sad and painful demise of Canada’s flagship telecom company.

In a stunning and surprising decision (tongue firmly in cheek), the government has decided that everything about the $4.5-billion sales of Nortel’s patents is okay-dokay.

“Officials have examined the applicable rules and threshold values under the Investment Canada Act as they apply to Rockstar Bidco LP’s proposed acquisition of Nortel’s patents,” Industry Minister Christian Paradis said in statement Tuesday. “Based on the information provided by the investor and Nortel’s 2010 audited financial statements, the acquisition of the Nortel patents is not subject to review for net benefit under the act.”

For more, check out this Toronto Star story.

Seriously, it would have been shocking if the government had decided to do a review given they’ve let every single Nortel asset be sold without moving a finger. Why would a treasure-trove of world-class patents warrant different kind of behaviour?

Wrong.

Instead, 12,000 pensioners recently received notification that their there will be cutback in benefits. This will reduce benefits by 18% for non-union employees in Ontario. Employees who worked outside Ontario will see cuts of 31% (non-union) and 25% (union)

Nortel has about $7.5-billion in cash after the patent sales.

For more, check out this Toronto Star story.

According to the Toronto Star, Industry Minister Christian Paradis has requested staff to see if the deal complies with the Investment Canada Act.

Keep in mind, this is the same government idly watched as Nortel sold asset after asset to foreign companies. We’re talking about Canada’s flagship’s high-tech company with more than 100 years of history behind it. Despite calls for Ottawa to get involved or provide financial support, nothing was done.

As a result, the Nortel empire was dismantled piece by piece.

Now, Ottawa wants to do a review? Seriously?

Who’s George Riedel and why should we be excited? Well, he’s Nortel chief strategy officer, who has overseen the company’s assets sales after CEO Mike Zafirovski abandoned ship in the wake of the disappointing and puzzling decision to surrender rather than fight on.

Now that the sale of Nortel’s 6,000+ patent portfolio has been sold to a consortium for a staggering $4.5-billion, the tally from all the asset sales now stands at $7-billion to $7.5-billion. Good work, George!

Keep in mind that Nortel went into bankruptcy protection with $4.5-billion in debt so being able to raise $7-billion from holding a telecom garage sales is a job well done.

And while Riedel will soon be looking for work, at least he stuck around to see things through, which couldn’t have been an easy assignment.

The big question now is how much of the asset sale booty will go to ex-employees who aren’t debt holders? With Nortel’s bankruptcy protection extended until December, there is a lot of work to be done before the company’s affairs are finally in order.

Nortel certainly did it in spades with the auction of its 6,000+ patent portfolio that raised a whopping $4.5-billion. The winning bidder was a consortium that includes Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony. It was interesting to see that Google, which made a $900-million stalking horse bid, was left in the cold.

“Following a very robust auction, we are pleased at the outcome of the auction of this extensive patent portfolio”, said George Riedel, Nortel’s Chief Strategy Officer and President of Business Units, who presided over the company while it was in bankruptcy protection much like the captain of the Titanic.

“The size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world.”

So, that’s it, the end of Nortel other than than some loose ends. Canada’s flagship high-tech company has disappeared amid strategic mistakes, bad acquisitions and a string of bad CEOs.

As I mentioned in a blog post on Mark Evans Tech recently, Nortel was also the victim of the puzzling decision to surrender rather than fight on. A key part of Nortel’s legacy will be then-CEO Mike Zafirovski’s decision to pull the plug rather than use bankruptcy protection to make Nortel a smaller but viable company.

Who knows why that happened. Maybe Mike Z. and the board couldn’t see a clear way out amid fierce competition. Maybe Nortel’s debt holders had so much clout, anything Nortel tried to do to financially fix itself would have been impossible to pull off.

Whatever the case, Canada is poorer for it, although when you look at how much money Nortel from its assets sales, it clearly shows Nortel had lots of value.

For what it’s worth, here’s Mike Z.’s last e-mail to the troops.

How come?

Google has entered into a stalking horse agreement to buy Nortel’s patent portfolio, the last piece of the company’s one-time telecom empire. In a deal worth $900-million, Nortel will transfer its remaining 6000 patents, which include “wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patent portfolios”.

Nortel, which is still in bankruptcy protection said the agreement followed a “confidential, multi-round bidding process involving several interested companies and consortia from around the world”.

“This is an unprecedented opportunity to acquire one of the most extensive and compelling patent portfolios to ever come on the market”, said George Riedel, Nortel’s Chief Strategy Officer and President of Business Units. “We look forward to what we hope will be a robust auction, following the requisite court approvals, currently expected to be held in June 2011″.

Nortel said it does not expect its common shareholders or the NNL preferred shareholders to receive any value from the creditor protection proceedings and expects the proceedings will result in the cancellation of these equity interests.

So why did Google agree to buy the patents. The biggest reasons appears to be to protect itself from patent “trolls” based on a Google blog post:

“The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits. It’s for these reasons that Google has long argued in favor of real patent reform, which we believe will benefit users and the U.S. economy as a whole.”

According to reports, Nortel is looking at whether to sell the portfolio or transform into into a licensing entity. The decision will be based on whether Nortel can attract a high enough price.

One company that will be interested in at least some of Nortel’s patents is Research in Motion, which made it abundantly clear that it wants the LTE patents.

Nortel is being advised by Lazard and Global IP Law Group.

“Today’s announcement is a positive step forward in securing a sound future for the LG-Nortel business and its valued customers,” Paul House, Chairman and General Manager, LG-Nortel, said in a press release. “Credit is due to the employees of LG-Nortel who have built this Joint Venture into a world class, profitable business.”

Earlier, Ericsson purchased Nortel’s CDMA and LTE R&D unit for $1.13 billion, and the assets of Nortel’s North American GSM business for $70 million.

With the sale of the LG-Nortel stake, the only major asset left on the table are the 3,000 patents – including the much-wanted LTE patents.

Well, Nortel seems to be intent on rewarding its senior executives for taking the S.S. Nortel down to the bottom of the bankruptcy ocean. According to an SEC filing, Nortel CFO John Doolittle is eligible for bonus of 100% of his base salary. Now, that’s great work if you can find it.
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In an April 20 filing with the Securities and Exchange Commission, bankrupt Nortel, which has sloughed off its most valuable units at various auctions, said new CFO John Doolittle is eligible for an annual bonus of 100 percent his base salary.

According to Phone+, Doolittle made $1.68-million in 2009 so…well, you can figure out the math.

Of course, this isn’t any consolation for the ex-employees who were chopped without severance or pensioners who are seen their benefits disappear but life isn’t fair sometimes….except if you’re a senior Nortel executive.