Nortel pensioners, workers on long-term disability and those who have been terminated over the last year were told Tuesday they should accept an offer from Nortel.
The recommendation came from court-appointed lawyers and from the various groups that represent the former workers.
Lawyer Mark Zigler of Koskie Minsky said in an web conference call Tuesday afternoon that the deal "will give people time to be politically active at both the federal and provincial level", resolving outstanding issues while giving workers benefits to the end of this year.
The hope is that the federal law can be changed to put pensioners at the top of the creditor list when it comes time to divide up assets.
The package will pay full health and income benefits for pensioners and LTD workers. The pension plan would be assumed at the end of September by provincial agencies and LTD benefits would cease at year's end. Zigler added that "by the end of the year Nortel will be down to a few hundred employees who will wrap things up and Nortel will cease to exist in any form."
Zigler admitted that people will give up most of their rights to sue the company, or directors, or trustees, but in his view such lawsuits would be risky and expensive with no real guarantee of success. The deal also means that the various groups would give up their opposition to the multi-million dollar incentive plan that pays cash to top employees to keep them from leaving the firm.
Diane Urquhart, a Toronto based financial analyst who has worked with the pension groups, says the deal being offered by Nortel "gets too little for workers and gives up too much."
There won't be a vote on the proposal but the Ontario court will hear any legal arguments against the deal on March 3, and Urquhart expects lawyers to appear.
Sue Kennedy of Ottawa heads the LTD group and tells CTV Ottawa: "I would love to find a magical lawsuit that could work but the responsible decision is to take the deal and the benefits it offers. "
"It's the laws that suck, Nortel did not break any laws, but morally they did not do what was right and the federal government takes no responsibility," she added.
Yesterday CTV News quoted Urquhart as saying that former Nortel director, John Manley of Ottawa, who was head of the pension committee, allowed Nortel to skip contributions to the pension plan. That in fact did NOT happen. CTV News apologizes to Urquhart for the misquote and to Mr. Manley.
