The national pension agency in the United Kingdom has won a major court decision that will put Nortel pensioners near the front of the creditor line.
This is exactly what Nortel pensioners in Canada have been calling for but the government here says there is no need to take such action.
Lehman Brothers Holdings and Nortel Networks have gone to court trying to stop a claim that is worth about $3.6 billion.
The High Court in London ruled that the two companies need to provide the money to top-up the underfunded pension plan in the UK.
"Parliament has legislated to create financial obligations applicable to and payable by a company in an insolvency process," the British judge said, according to a Bloomberg News report.
The judge did say the companies could appeal his ruling.
There are 43,000 Nortel pensioners in the UK and the pension regulator claimed the pension plan is "seriously underfunded." Critics of the ruling say it means that pensioners' claims in any bankruptcy case could wipe out the claims of other creditors.
