Advertisement

Nortel Networks Settlement Approved

Advertisement

The U.S. Bankruptcy Court issued an order approving Nortel Networks (NNI)’s motion to approve a compromise and settlement with purchaser Ciena Corporation.

As previously reported, “As of the date of this Motion, the Distribution Escrow Accounts hold approximately $7.3 billion in Sale Proceeds. Among such escrow accounts is the MEN Distribution Escrow Account, as provided in that certain MEN Distribution Escrow Agreement, dated as of March 19, 2010, which holds the portion of the Sale Proceeds generated by the sale of the Business….The Disputes relate to outstanding amounts due from the Purchaser to certain Sellers, including NNI. In particular, NNI believes that it is owed approximately U.S.$648,552 by the Purchaser in fees for transition services provided pursuant to the TSA. Other Sellers also have claimed outstanding amounts due from the Purchaser in the additional amount of approximately U.S.$2.6 million.”

In addition, “As relevant to the Debtors, Nortel Networks de Argentina S.A. (‘NN Argentina’), which was one of the Other Sellers and a party to the Non-Filed Entities Settlement, claims an outstanding amount due from the Purchaser in the amount of U.S.$1,134,901 as reimbursement for payment of Value Added Tax and severance obligations. Under the terms of the Settlement, the Purchaser agrees to pay U.S.$2,300,000 to certain Sellers in full satisfaction of the amounts due from the Purchaser under the Ancillary Agreements. Of that amount, the Settlement contemplates that U.S.$456,985.49 will be paid to NNI in full satisfaction of amounts owed by the Purchaser to NNI for transition services….In aggregate, NNI will receive a payment from the Purchaser in the amount of U.S.$974,119.98.”

Read more telecom bankruptcy news.