The bankrupt and all but derelict hulk of Nortel Networks should have been consigned to the depths of Lake Ontario years ago but somehow, riddled with rot though it may be, it's still just about afloat, as Martyn Warwick reports.
That's because the Canadian federal government has granted Nortel yet another stay of execution and is allowing the moribund rump of a once great company to stay in creditor protection until February 28 next year. Thanks to the largesse and remarkable patience of the Canadian legal system, Nortel has continued to exist in the twilit limbo of Chapter 11 bankruptcy protection since January 2009 when it it was first granted shelter from the welter of claims made against it by unpaid creditors.
The latest extension means that Nortel doesn't have to pay out a single red cent of the vast sums it owes. Since it went belly-up Nortel has sold most of its remaining assets including corporate crown jewels such as its optical, Ethernet and wireless divisions.
They went at fire-sale prices to Nortel's erstwhile competitors who, between them, have picked-up some real bargains.
The company claims that money raised from the sales will "eventually" be used to pay creditors but shareholders, who stood by helplessly as dreadful management decisions destroyed the company before their very eyes, won't get a bean.
Back in 2009, Nortel,filed for bankruptcy protection after losing almost US$7 billion in less than five years.
And as Nortel sits there safe and sound in its bankruptcy-protected zone, it is continuing to get rid of what's left of its dwindling assets.The company recently sold off its massive campus in Ottawa and its business unit in Turkey. Meanwhile Nortel pensioners are being squeezed until their pips squeak. Many, after paying into various Nortel schemes year-after-year-on-end will lose their company-funded benefits at the end of December. January 1, 2011 will not signal the start of a prosperous new year for most of them.
Meanwhile, it seems likely that the courts will grant Nortel yet more time in bankruptcycprotection after February 28 next year, if the company asks nicely - which it will. No-one seems to know when this embarrassing debacle will finally come to end end, but we do know that it will be with a pathetic whimper rather than a bang.
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