Nortel to appear before federal finance committee
CTV Ottawa has learned that the House of Commons finance committee will tackle the financial troubles plaguing Nortel Networks Corp.
The committee is already looking at pension and credit problems for several companies and wants to include Nortel in its probe.
The committee's clerk said they expect to hear from Nortel management and laid off workers later this month.
The Ontario Superior Court that is overseeing the company's restructuring efforts cut the future transfer ratio for the company's defined benefit pension plans on Monday.
The court ruled former employees who applied for the transfer before the ruling will receive the previous rate.
The ruling means some 180 terminated employees will receive an initial payment of about 85 per cent of the value of their pensions. Subsequent initial commuted value payouts will be made at the court approved 69 per cent ratio.
Following the initial commuted value transfers, the remaining balance must be paid by the plan over a five-year period as required by pension legislation.
"While the company understands the impact this will have on plan participants, this is a necessary step in response to the decline in the financial markets and is needed to ensure fair and even-handed treatment for all plan members, including retirees," Nortel said.
Nortel was granted bankruptcy protection by an Ontario Superior Court judge from its creditors under the Companies' Creditors Arrangement Act in January. In April, Nortel was granted a 90-day extension of its court protection from bankruptcy until July 30.
The company also filed for Chapter 11 bankruptcy protection in the United States.
With files from The Canadian Press