Nortel wrapping up bankruptcy process

The Canadian Press ~ OBJ
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Insolvent Nortel Networks Corp. says it has sold all of its businesses and remaining patents, generating proceeds of US$7.8 billion and is working to wrap up the creditor protection process.

A view of a Nortel lab.

The now defunct telecom company, which reports in U.S. dollars, said as of the second quarter ended June 30, it had $688 million in cash, plus a restricted cash balance of $7.6 billion consisting mainly of proceeds from its divestments.

The company said it will no longer continue provide quarterly financial statements after the third quarter as it winds down operations.

In the most recent quarter, it reported a net loss of $131 million, up from a loss of $115 million in the second quarter of 2011.

Revenues were nil, compared to $1 million in the year-ago quarter, when it still had some remaining customer contracts.

Expenses fell to $25 million from $53 million.

The Ontario Superior Court of Justice last month granted Nortel and its subsidiaries an extension under the Companies' Creditors Arrangement Act until Oct. 31.

Nortel's court protection has been extended several times.

Since Nortel declared bankruptcy in early 2009, the company has sold US$3.2 billion of operating units - bringing the total value of the company's selloff to US$7.8 billion - one of the biggest asset sales in Canadian history.

Nortel, which once employed 95,000 people around the world and was worth nearly $300 billion, filed for bankruptcy protection in the U.S. and Canada in early 2009.

Ten years ago, at its height, Nortel was among the world's most advanced developers of telecom equipment and accounted for a third of the value of all companies listed on the Toronto Stock Exchange.

But the company was felled by changing market conditions, economic upheaval and an accounting scandal that devastated its stock price.

Three of its former senior executives are currently on trial in Toronto on fraud allegations.

Nortel's ex-CEO Frank Dunn, former CFO Douglas Beatty and ex-controller Michael Gollogly have pleaded not guilty to the charges related to manipulating Nortel's books and defrauding the company of $12.8 million in bonus payments.

Organizations: Nortel, Ontario Superior Court, Toronto Stock Exchange

Geographic location: U.S., Canada, Toronto

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  • Aubrey Little
    December 07, 2012 - 15:12

    I still hold NORTEL shares. My question regarding Nortel is: Is Nortel legally bankrupt and/or insolvent under any Canadian law ? If yes, who is the "Trustee in Bankruptcy" ? and how is it possible for the shares of a bankrupt company to still trade (NRTLQ - Pink Sheets OTC)? OR, is Nortel still just under CCAA Creditor Protection? Thank you.