Nortel Networks filed with the U.S. Bankruptcy Court a First Amended Chapter 11 Plan and a related Disclosure Statement.
According to the Disclosure Statement, “The key components of the Plan include: Payment in full of all Allowed Administrative Expense Claims, Priority Tax Claims, Priority Non-Tax Claims, and Secured Claims against each Debtor. A global resolution among the Nortel Group regarding the allocation of the Sale Proceeds among each of the Nortel Group estates and settlement of other inter-estate claims and other claims, through a negotiated Settlement and Plans Support Agreement.”
The Disclosure Statement continues, “Approval of a process whereby the Sale Proceeds currently in the Escrow Accounts shall be released simultaneously to each Nortel Group estate. The substantive consolidation of NNI and NNCC. The satisfaction, compromise, and settlement of various Intercompany Administrative Expense Claims. The appointment of a Plan Administrator to wind down and distribute the assets of each Debtor estate….The Plan divides the Claims against and Interests in each Debtor into Classes.”
In addition, “Class A-3C consists of Convenience Claims against the Consolidated Debtors. A Convenience Claim is any Class 3A General Unsecured Claim, (i) in an Allowed amount equal to or less than $25,000 whose holder elects on its ballot for such Claim to be Allowed as a Class 3C Convenience Claim and receive treatment as a Class 3C Convenience Claim in accordance with the Plan, or, (ii) in an Allowed amount larger than $25,000, whose holder elects on its ballot for such Allowed Claim to be reduced and Allowed at $25,000 in order to receive treatment as a Class 3C Convenience Claim in accordance with the Plan. Class A-3C is impaired and is entitled to vote to accept or reject the Plan….NNI’s assets expected to be available for distribution to its creditors, and to pay for other wind-down and Plan implementation expenses include its right to receive distributions on the $62.7 million U.S. Canadian Priority Claim and $2 billion U.S. Canadian Unsecured Claim against certain Canadian Debtors.”
The Court scheduled a December 1, 2016 hearing to consider the Disclosure Statement, with objections due by November 18, 2016. Read more NNI bankruptcy news.