The court orders also established bidding procedures for an auction that will let other qualified bidders to submit higher or better offers, as required under Section 363 of the U.S. Bankruptcy Code. These bids must be submitted by June 13, 2011, subject to any permitted extensions.The auction is scheduled for June 20, 2011. Following completion of the bidding process, the sale will require final approval of the U.S. and Canadian courts.

Among the companies expected to bid for the patents are Research in Motion, which is interested in Nortel’s LTE patents.

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 Reuters, final bids are due within weeks, including its much-coveted 4G wireless patents. Among the companies expected to be interested in the patents are RIM, Apple and Google.

The 4,000 patents are expected to be worth more than $1-billion, which would make Nortel’s creditors happy but do likely do little to help ex-employees who were let go without any severance, Nortel’s pensioners or people who had been on long-term disability.

“There has been one round of bidding on those patents, this has been completed,” a source told Reuters. “And what Nortel has done is divide the patents up into different lots covering different kinds of technologies.”

“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.

Whether the deal has been consummated is unclear as LG said nothing has been decided about Nortel’s stake in the joint venture. “No schedule or partner has been decided for the moment,” LG spokesman Kim Gyeong told Bloomberg.

In a press release, Nortel said today that Genband has acquired the business for US$182-million after taking into account “balance sheet and other adjustments” worth US$100-million. Genband made a “stalking horse” bid in December for the business.

The absence of another bidder to compete against Genband is pretty ironic given Nortel issued an update recently crowing about how its stalking horse process had attraction sales of more than $1-billion over the original bids.

The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on March 3, 2010, and in Israel. Nortel will work diligently with GENBAND to close the sale in the second quarter of 2010, subject to the timing of regulatory approvals.

Despite a lot of speculation about who might bid for the business, which generated $870-million in revenue in 2008, Genband came out of nowhere with its bid. It seems like a low price but what’s even more surprising is that the bid isn’t really worth $282-million. After taking into account a bunch of closing issues, the bid is actually $100-million less. (Source: Ernst & Young Monitor’s Report).

Some other strange parts about the deal include a $3.6-million payment by Nortel to One Equity Partners, which owns 35% of Genband, for providing financing to Genband. As well, there’s a break-up fee of $5-million.

The carrier business employs 2,185 full-time employees, including 592 in Canada, who mostly do R&D. In the Monitor’s Report, Genband said it has committed to retaining at least 1,638 employees

If another bid materializes, an auction will be held Feb. 24 in New York. Other bidders could include Huawei, Alcatel-Luccent, Nokia Siemens, Broadcom, Metaswitch and Sonus.

For more details about the Genband bid, check out Bert Hill’s story in the Ottawa Citizen.

According to a Nortel spokeman (via GigaOm), the remaining assets include the joint venture with LG (Nortel-LG) and the 3,000 or so patents, including the much-coveted LTE patents.

And after their sale, that will be it. There will be noting left – zilch, nada, zippo, zero, nul, nunca. More than 100 years of corporate history will go down the drain, and provides years and years of business school case studies in the process.

The deal happened a few months after Mike Zafirovski had taken over as CEO from Bill Owens. If anyone was looking for Mike Z. to start his new gig with a major bang, the purchase of Tasman Networks was a disappointment. In the scheme of things, the $99-million acquisition was a baby step when Nortel needed to take giant steps to reinvent or reinvigorate itself.

As well, it’s important to point out that the Tasman deal was one of the few acquisitions made by Nortel during Mike Z’s. Reign of Error. This was despite the fact he lured an M&A top-gun, George Riedl, from Juniper Networks in early-2006.

The major moves that Nortel could have made to transform itself never happened. As a result, Nortel continued to lose it status as a first-tier telecom equipment supplier that didn’t dominate any particular business.This isn’t to suggest one deal could have been the silver bullet to resuscitate Nortel but, in hindsight, it might have made a difference if Nortel had made big, bold move.