Nortel Networks (NNI) filed with the U.S. Bankruptcy Court a First Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement.
According to the Disclosure Statement, “The Plan applies separately to each of the Debtors, subject to the substantive consolidation of NNI and NNCC….The key components of the Plan include: Payment in full of all Allowed Administrative Expense Claims, Priority Tax Claims, Priority Non-Tax Claims, and Secured Claims against each Debtor. A global resolution among the Nortel Group regarding the allocation of the Sale Proceeds among each of the Nortel Group estates and settlement of other inter-estate claims and other claims, through a negotiated Settlement and Plans Support Agreement. Approval of a process whereby the Sale Proceeds currently in the Escrow Accounts shall be released simultaneously to each Nortel Group estate.”
The Disclosure Statement continues, “The substantive consolidation of NNI and NNCC. The satisfaction, compromise, and settlement of various Intercompany Administrative Expense Claims. The appointment of a Plan Administrator to wind down and distribute the assets of each Debtor estate….NNI’s assets expected to be available for distribution to its creditors, and to pay for other wind-down and Plan implementation expenses include its right to receive distributions on the $62.7 million U.S. Canadian Priority Claim and $2 billion U.S. Canadian Unsecured Claim against certain Canadian Debtors.”
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