* Company seeks bonuses for 10 employees
* U.S. trustee says plan lacks details
* Mediation begins Jan. 14 to resolve bankruptcy
Jan 7 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
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
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 Jan. 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."