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Nortel Networks Compromise Approval Sought

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Nortel Networks filed with the U.S. Bankruptcy Court a motion to approve a compromise and settlement agreement by and among the Debtors and the Pension Benefit Guaranty Corporation with respect to PBGC claims and related issues.

The motion explains, “As a result of a mediation overseen by the Court-appointed mediator, Judge Joseph Farnan, the Debtors and the PBGC have reached an agreement that provides the PBGC with a single allowed general unsecured claim against each of the Debtors in their respective Chapter 11 Cases in the amount of $624,601,972, subject to a cap on the PBGC’s right to receive distributions on such allowed claims in the maximum aggregate amount of $565,000,000.”

The motion continues, “This allowed claim, as capped, would be granted in full satisfaction of any claims the PBGC may have against the Debtors, which have been asserted in an amount in excess of $700,000,000….After vigorous arms-length negotiations, the Debtors and the PBGC were able to reach a compromise to settle the dispute over the PBGC Claims and the Objection. Subject to the Court’s approval, the Settlement Agreement provides, in pertinent part, that the PBGC shall receive a single allowed general unsecured claim against each of the Debtors in the amount of $624,601,972 (the ‘Allowed Unsecured Claim’); the allowance of the Allowed Unsecured Claim shall be granted in full satisfaction of any and all claims that have been or could have been asserted by the PBGC against the Debtors; the PBGC shall not have any further claims against any of the Debtors; the maximum aggregate distributions the PBGC shall receive on its Allowed Unsecured Claim from the Debtors is $565 million.”

The Court scheduled a January 9, 2017 hearing to consider the motion, with objections due by January 5, 2017.

Read more NNI bankruptcy news.

The post Nortel Networks Compromise Approval Sought appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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