U.S. trustee objects to Nortel incentive plan
(Reuters) - A U.S. trustee has objected to Nortel Networks Inc's plan to offer $1.8 million in bonuses to employees as the once-mighty telecommunications company nears critical mediation talks to resolve its four-year bankruptcy.
Nortel last month asked the U.S. Bankruptcy Court in Delaware to approve incentive payment plans that could reward 10 employees for taking on broader responsibilities if certain restructuring targets are met.
The U.S. Trustee for Region 3, Roberta DeAngelis, objected to the proposal because it does not provide details on the employees expanded roles and does not disclose individual performance targets.
The U.S. Trustee, an agent of the Department of Justice who oversees bankruptcy cases, also said the bonuses equal at least 100 percent of the regular pay for each employee.
James Bromley of the law firm Cleary Gottlieb Steen & Hamilton, who represents Nortel, did not immediately respond to a request for comment.
Nortel has proposed incentive bonuses potentially worth $1.08 million for seven unidentified employees. Separately, Nortel proposed a bonus plan worth a total of $774,750 for Timothy Ross, the chief financial officer, Allen Stout, the controller and Luis Guerra Sanz, who is leading the company's liquidation.
A hearing on the incentive plan has been scheduled for Wednesday in Wilmington, Delaware.
Kevin Gross, the Delaware bankruptcy judge overseeing Nortel, approved a similar bonus plan for 2012 that covered 97 employees and was worth up to $3.5 million.
Nortel once dominated the Toronto Stock Exchange as a $250 billion telecoms company that spanned the globe. It struggled after the 1990s tech bubble burst and, dogged by accounting problems, filed for bankruptcy in January 2009.
The company has sold all of its operations, piling up nearly $9 billion cash. That has sparked bitter feuds in courts around the world among bondholders, pensioners, disabled former employees, suppliers and governments, who are all still waiting to find out what they will be paid.
On January 14, a week-long mediation will begin in Toronto to try to resolve what the mediator, Ontario Chief Justice Warren Winkler, said was "one of the most complex trans-national legal proceedings in history."
(Reporting By Tom Hals in Wilmington, Delaware; Editing by Nick Zieminski)
- Malaysian plane presumed crashed; questions over false IDs |
- China draws 'red line' on North Korea, says won't allow war on peninsula
- Warning shots fired to turn monitors back from Crimea |
- Libya threatens to bomb North Korean tanker if it ships oil from rebel port