Nortel bankruptcy hearings to divide $7.3B in assets
Nortel pensioners gathered at a Toronto courtroom on Monday to watch lawyers battle over billions of dollars in asset sales from the former technology giant — a fight that could have a major impact on their financial futures.
With their eyes locked on a giant projection screen, more than 20 pensioners sat in an overflow room watching the start of the seven-week cross-border trial unfold through a high-tech feed.
The showdown, playing out in courts in Toronto and Delaware via a secure multi-camera video link, is aimed at determining how $7.3 billion of remaining Nortel's assets are divided between former employees, pensioners, creditors and bondholders.
Judges in both Toronto and Wilmington, Del., are conducting the proceedings simultaneously.
On Monday, Nortel's former employees were easily outnumbered by lawyers — at least 50 legal staff were in the Toronto court and another group was in Delaware — fighting over the remains of a company once hailed as Canada's technology darling.
William Galloway worked for 30 years at Nortel before he was unceremoniously laid off in 2009 in a move than changed his life dramatically.
"When I was locked out I was not given severance. One day, that's it, you're done," said Galloway, 63, who sidelined his dreams of vacationing in Florida and isn't sure if he may eventually have to put his home up for sale.
"Everybody knows that when they go on pension ultimately you're going to have to live a somewhat reduced lifestyle. This is way more reduced than we had planned," he said.
"Other people are trying to profit by this. All we want is what we were promised," he added.
The arguments began with lawyers representing Nortel's European operations, who told the judges that their division deserves a piece of the money generated from $4.5 billion in patent sales, even though they were legally owned by the parent company.
Lawyer Brian O'Connor, who represents UK Nortel pension plan members, described a Nortel that was once united, but has turned into a widely divided operation while the various parties "fight like jackals over the carcass."
"The bickering and squabbling has to come to an end," he said.
The Nortel trial is considered one of the biggest bankruptcy cases in Canadian history.
Filings with the courts say about 16,000 documents will be presented as exhibits over the coming weeks — whittled down from an initial three million — and 110 witness depositions have been taken leading up to the trial.
The cost of the Nortel case has climbed to US$1.185 billion since early 2009, according to an estimate from Diane Urquhart, an independent adviser assisting former Nortel employees.
At its height in 1999 to 2000, Nortel was worth nearly $300 billion, employed more than 90,000 people globally and was regarded as one Canada's most valuable companies.
In 2009, the company filed for bankruptcy in North America and Europe, shedding thousands of jobs.