Nortel Networks’ First Amended Joint Chapter 11 Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The U.S. Bankruptcy Court confirmed Nortel Networks’ Plan on January 24, 2017. Nortel Canada’s Companies’ Creditors Arrangement Act Plan also became effective following Ontario Superior Court of Justice approval on the same date.
BankruptcyData’s detailed Plan Summary notes, “Nortel Networks Corporation and Nortel Networks Limited and together with certain of their Canadian affiliates subject to proceedings under Canada’s Companies’ Creditors Arrangement Act, entered into a Settlement and Plans Support Agreement with Nortel Networks Inc., Nortel Networks UK Limited, certain other global Nortel entities and various significant creditor constituents of the Nortel entities. The Global Settlement and Support Agreement provides for a resolution of the allocation dispute regarding the approximately U.S. $7.3 billion of sale proceeds currently held in escrow as well as various other claims, disputes and matters among the parties. Pursuant to the Global Settlement and Support Agreement, Nortel Canada will receive 57.1065% of the sale proceeds in escrow, being approximately U.S. $4.143 billion as at July 31, 2016. The Global Settlement and Support Agreement also provides for, among other things, the release to Nortel Canada of approximately U.S. $237 million of other sale proceeds plus a further amount of sale proceeds relating to the transfer of I.P. addresses by Nortel Canada currently held subject to various court orders, as well as payment to Nortel Canada of U.S. $35 million on account of reimbursement of various costs incurred in connection with the asset sales.”
According to a corporate release, funds are expected to be received by Nortel Networks Limited from escrow beginning on May 11, 2017, with the balance of funds anticipated to be received over the course of May 2017. Subject to receipt of Nortel Networks Limited’s allocation entitlement and the satisfaction of certain other conditions to the implementation of the CCAA Plan, initial distributions to unsecured creditors are expected to be made beginning in the late June or early July 2017 timeframe. Holders of Nortel Networks Corporation common shares and Nortel Networks Limited preferred shares are not expected to receive any distribution or other compensation pursuant to the CCAA Plan.
Telecommunications and internet service provider Nortel Networks, Inc. filed for Chapter 11 protection on January 14, 2009, listing $9 billion in pre-petition assets; and Nortel Networks Corporation concurrently initiated a Chapter 15 filing with $17 billion in assets.
Read more NNI bankruptcy news.