May 12, 2015
We are very pleased to report that on May 12, 2015, the Ontario Superior Court of Justice (Commercial List) and the United States Bankruptcy Court released consistent decisions requiring the allocation of assets from the sale of Nortel’s businesses and intellectual property be based on a pro rata approach. The “lockbox” of funds from the patent and business sales is to be allocated proportionately based on the aggregated claims in each of the three jurisdictions. All creditors, including Canadian pensioners and disabled employees, are to receive a fair and equitable payment of their claims. The decisions take an unprecedented approach, and are a major breakthrough in the cross-border litigation.
The Canadian Creditor’s Committee (CCC), representing employee and pension interests, advocated pro rata as the most equitable allocation method, and it best reflected the reality of the way that Nortel functioned globally as a highly integrated organization.
To view a copy of the opinion of Judge Gross of the U.S. Bankruptcy Court please click here. To view a copy of Judge Gross’ Allocation Order please click here.
For more information regarding the allocation dispute, including pleadings and summaries of the proceedings, please visit our Nortel Allocation Litigation tab.