Feb 14 A settlement between Nortel Networks Inc
and its U.S. long-term disabled employees received
preliminary approval from the bankruptcy court that is
overseeing the liquidation of the U.S. assets of the failed
telecommunications equipment maker.
The Thursday ruling by Judge Kevin Gross of the U.S.
Bankruptcy Court in Delaware allows for the settlement to be
mailed to the approximately 200 disabled employees and allows
them to raise objections at a final hearing on April 30.
Nortel, once the largest telecommunication equipment company
in North America, agreed not to terminate any of the existing
long-term disability benefits for its former employees on or
before May 31, unless the company grants the committee a general
unsecured claim of $28 million.
After the settlement is approved, the long-term disabled
employees would receive the general unsecured claim, which they
would be free to sell.
Nortel would be freed from any further liability.
Several disabled employees have raised initial objections to
the settlement for a variety of reasons, including a request for
an independent auditor to oversee the disbursement of any funds.
Nortel has sold all of its operations, piling up $9 billion
in cash in the process. However, bankruptcy and insolvency
proceedings in Canada, the United States and Europe are now
preparing for litigation to determine how to split that money.
The bankruptcy case is In re: Nortel Networks Inc et.al, U.S.
Bankruptcy Court, District of Delaware, No: 09-10138