Former Nortel employees' hopes of getting some of the company's $57 million pension deal for their years of service may be dashed if U.S. creditors get their way.
Creditors that are fighting the pension deal include Bank of New York Mellon, which claims Nortel owes them about $4 billion; equipment manufacturer Flextronics; and the Pension Guarantee Corp., a group that represents approximately 30,000 U.S. Nortel pension holders.
These creditors are concerned that if Canada changes its current insolvency laws, pension holders will get the money that should have gone to them. At this point, Nortel's current assets and the money it gets from selling off those assets will only pay for about 50-70 percent of overall claims.
Set to be heard in the Ontario Superior Court early next month, the $57 million amount would pay for former Nortel employee's pension, healthcare and long-term disability benefits through December. In addition, the figure would also pay $3,000 to each of the 1,200 Nortel workers let go without a severance package over the past year.
- see this Ottawa Citizen article
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