Nortel Networks Wins Approval to Distribute $7.3 Billion to Creditors

Nortel Networks Corp. won approval to start distributing $7.3 billion to creditors, a major step in the long-running demise of the telecommunications company, The Wall Street Journal reported. Judges in Canada and the U.S. on Tuesday cleared Nortel to open up the lockbox containing $7.3 billion raised by selling its businesses and patents in bankruptcy. While most Canadian creditors will collect less than half of what they are owed under the plan, bondholders with claims against both Nortel in Canada and its U.S. unit expect to recover 95% or more of what they’re owed. Checks should go out in the next couple of months, according to Lisa Schweitzer, lawyer for Nortel’s U.S. unit. Once the pride of Canada’s technology community, Nortel filed for insolvency protection in its home country, the U.S. and elsewhere in January 2009, unable to compete with the new crop of technology firms and contend with a global recession. At Tuesday’s joint hearing of the Ontario Superior Court of Justice and a U.S. Bankruptcy Court, judges signed off on pacts that say how the last of Nortel’s wealth will be apportioned among creditors around the globe. Read more. (Subscription required.)