North America

Nortel Networks Corp.’s former employees and pensioners asked a Canadian judge to order the insolvent telephone-equipment maker to pay them benefits including severance and pension supplements, Bloomberg reported. The company filed for bankruptcy in January in the U.S. and Canada after losing almost $7 billion since 2005. Toronto-based Nortel ceased paying former workers some pension benefits and refused severance and termination payments, saying under bankruptcy protection those are unsecured claims.

Toronto-based PharmEng International Inc., a contract drug manufacturer, says it plans to file a proposal under the Bankruptcy & Insolvency Act (Canada) after defaulting on millions of dollars in debt obligations, The Canadian Press reported. A. Farber & Partners Inc. has been appointed as the licensed trustee in bankruptcy for the company, PharmEng said. The move comes after the company defaulted on $7 million worth of debt obligations earlier this month. In addition, PharmEng said it's also in default under its $14 million credit facility and term loan with Landsbanki Islands h.f.

Fiat SpA's chief executive, facing a two-week deadline to work out a partnership with Chrysler LLC, warned the troubled U.S. carmaker's unions he would ditch the idea unless they agreed to cut labor costs, Reuters reported. In a clear message to U.S. and Canadian unions, Sergio Marchionne told Wednesday's Globe and Mail newspaper a deal on the partnership had only a 50-50 chance of succeeding because of lack of progress in talks with union leaders. "Absolutely we are prepared to walk.

Asarco LLC, the bankrupt Grupo Mexico SAB unit, must wait for a ruling on its proposed sale to Sterlite Industries Ltd., India’s biggest copper producer, for $1.1 billion in cash and a $600 million note. U.S. Bankruptcy Judge Richard Schmidt declined to rule on Asarco’s request to sign a sale contract with Sterlite at a hearing today in Corpus Christi, Texas. Lawyers for the buyer said they would try to get an extension of tomorrow’s deadline to allow the judge more time to reach a decision.

Mexican mining company Grupo Mexico SAB threw a fresh punch in its fight to retain U.S. copper subsidiary Asarco LLC, pledging $1.3 billion in cash to take the unit out of Chapter 11 proceedings and defeat a rival bid by Vedanta Resources PLC, The Wall Street Journal reported. Though Vedanta's deal to acquire Asarco has a higher total--$1.7 billion--it includes just $1.1 billion in cash, plus a note for $600 million. A U.S. bankruptcy judge will have to determine which offer better serves Asarco's many creditors, including the U.S.

As Barack Obama, the U.S. President, eyes a "quick and surgical" bankruptcy solution for ailing automakers, don't expect the wound in Canada to be as clean or neat should car companies here seek creditor protection under the Companies' Creditors Arrangement Act (CCAA). That's because of a difference in Canadian labour and insolvency law, the Financial Post reported. In the United States, insolvencies can be used to end high-cost union contracts if certain procedures are followed.

After a year of complex negotiations, Quebecor World Inc. has worked out a deal on the key terms of a restructuring plan with its major creditors and anticipates emerging from bankruptcy protection by mid-July, The Globe and Mail reported. The agreement marks the end of a troubled chapter for what was once a key company in the media and printing empire of Pierre Karl Péladeau, and will usher in changes such as recapitalization and deleveraging of the company, which filed for protection 14 months ago.

The wholly owned Canadian subsidiary of Indalex Inc. has initiated bankruptcy proceedings due to the pervasive decline in the global economy and the slide in demand for extruded aluminum products. Indalex Canada filed for protection under the Companies' Creditors Arrangement Act (CCAA), which is similar to Chapter 11 bankruptcy proceedings in the United States. The case will be heard in the Ontario Superior Court of Justice. The company last month filed for Chapter 11 protection for its U.S. operations.

Chief Executive Sergio Marchionne is again in the United States for talks with potential partner Chrysler, a source close to the company said on Thursday. He may have a meeting with Chrysler executives in New York, where an auto show is currently underway, Reuters reported. Fiat and Chrysler are trying to finalize a partnership by the end of April which would help the U.S. car maker avoid bankruptcy. On Wednesday, Chrysler Vice Chairman Jim Press said his company was working around the clock to complete the deal.

Any bankruptcies among U.S. automakers could further batter Mexico's auto industry, push some parts suppliers to the breaking point and spur tens of thousands of layoffs, a Reuters analysis has found. Fears are mounting that General Motors Corp and Chrysler LLC could be lurching toward bankruptcy. A Chapter 11 filing by either automaker could upset Mexican assembly lines and disrupt the flow of cash to auto parts makers, possibly spurring bankruptcies among the smallest or those already facing liquidity problems, analysts say. Mexican subsidiaries of U.S.