Big Winners in Nortel's Demise? Lawyers - Bankruptcy Beat - WSJ

By Caroline Van Hasselt

The real winners to emerge from former Canadian technology icon Nortel Networks Corp. ?s sorry demise are the lawyers.

They?ve made more than a half a?billion?dollars?about $630 million?from the company?s bankruptcy over the past four years, according to data from court filings compiled by Diane Urquhart, a Toronto-based independent financial analyst.

That?s a quarter of the amount being claimed in bankruptcy mediation talks in Toronto this week by Nortel?s roughly 20,000 former employees in Canada, including pensioners and long-term disabled employees.?They?re seeking 2.51 billion Canadian dollars ($2.54 billion) from Nortel, of which C$85 million is for the long-term disabled. The lawyers have already garnered seven times more than the amount sought by the long-term disabled workers.

All of the ex-employees fall into the unsecured creditor camp, well down on a list that boasts the likes of George Soros?s Quantum Partners fund.

Creditor claims from, among others, bondholders, suppliers, governments and former employees around the globe total a staggering $20 billion. But, with just $9 billion in cash being all that?s left of Canada?s once-mighty tech giant, Ontario Chief Justice Warren Winkler is attempting this week to broker a compromise. It?s sure to disappoint some.

Keep reading at Canada Real Time.

Source: http://blogs.wsj.com/bankruptcy/2013/01/15/big-winners-in-nortels-demise-lawyers/

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