Nortel has provided a significant update on efforts to divide up the final assets of the tech giant.
In a statement released Wednesday Nortel said it will follow court orders handed down this week and set up a sole mediator to try to resolve the disposition of about $4 billion in assets.
The various parts of Nortel from Canada, the United States, plus Britain and Europe have agreed to "participate in a joint mediation of the issues raised … the mediator shall determine the time, date, place and protocol of the mediation."
All the parties have also agreed that the mediator will have extra power to enforce arbitration if needed. The statement does not provide any timetable for this to happen.
The same parties had asked the courts to make a decision and now the courts have thrown it back at the business groups to get it resolved.
A few months ago an effort to figure out how to divide up assets failed to get any agreement. Until this kind of agreement is made, the money cannot be distributed to pensioners, creditors and investors.
Assets from selling off Nortel will be around $4 billion while claims may run from $11 billion to over $24 billion depending on what claims are allowed.
In another court ruling, a U.S. judge says Nortel's American pensioners and disabled workers are entitled to have their own legal representation and committees. Nortel is considering cutting benefits.
Here in Canada, the courts approved an end to benefits for disabled workers, and pensioners are waiting to see how much benefits will be cut when it's known how much money will stay in Canada as assets are finally divided up.
In court, Nortel said it is costing them about $2 million a month for benefits to the disabled and pensioners and that Nortel cannot continue to pay that out.
