Nortel Networks filed with the U.S. Bankruptcy Court a notice of execution of a settlement and plan support agreement.
According to documents filed with the Court, “The Parties hereto agree to allocate the Sale Proceeds as follows: (i) U.S. Debtors: 24.350%, U.S.$1,766,417,002 (the ‘U.S. Allocation’); (ii) Canadian Debtors: 57.1065%, U.S.$4,142,665,131 (the ‘Canadian Allocation’); (iii) EMEA (Non-NNSA/Non-NNUK) Debtors: 1.4859%, U.S.$ 107,788,879 (the ‘EMEA (Non-NNSA/Non-NNUK) Allocation’); (iv) NNUK: 14.0249%, U.S.$1,017,408,257 (the ‘NNUK Allocation’); and (v) NNSA: U.S.$220,000,000 (the ‘NNSA Allocation,’ and collectively with the EMEA (Non-NNSA/Non-NNUK) Allocation and the NNUK Allocation, the ‘EMEA Allocation’). The EMEA Allocation shall be 18.5435%, provided, however, within the EMEA Allocation, the NNSA Allocation is fixed at U.S.$220,000,000 and NNSA shall not share proportionally with any increase or decrease in the Sale Proceeds as the result of the matters contemplated in Section 2(d) hereof, and any such increase or decrease in the Sale Proceeds that would but for this Section 2(c)(v) have been allocated to NNSA shall be allocated to NNUK.”
The filing further notes, “The Canadian Debtors shall be substantively consolidated pursuant to the Canadian Plan on the Plans Effective Date with all intercompany claims between and among the Canadian Debtors being thereby eliminated for purposes of the Canadian Plan and no distributions or payments will be made by the Canadian Debtors on account of such claims under the Canadian Plan or otherwise, and all unsecured creditors holding claims against the Canadian Estate (including the U.S. Debtors’ $2.0 billion Proven Claim (the ‘U.S. Canadian Claim’), the Crossover Bondholders’ Proven Claims of U.S.$3,940,750,260 in the aggregate, the NNCC Bondholders’ Proven Claim of U.S.$150,951,562, the Proven Claims held by certain of the EMEA Debtors in an aggregate amount not to exceed U.S.$125,000,000…(respectively, the ‘EMEA Canadian Claim’ and the ‘EMEA Canada Settlement Agreement’) and the UKPI’s Proven Claim of £339.75 million6 (the ‘UKPI Canadian Claim’) and the Canadian Pension Claim) will be paid paripassu by the Canadian Estate with all other general unsecured creditor distributions without discrimination of any kind. The U.S. Debtors’ allowed U.S.$62.7 million secured claim (defined as the ‘Remaining Revolver Claim’ in the CFSA) (the ‘U.S. Canadian Priority Claim’) will retain its priority status granted by the CCAA Court in the order dated January 21, 2010.”
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