Lawyer for Nortel pensioners say former employee face 'significant losses'
TORONTO - A lawyer for former Canadian Nortel employees says tens of thousands of pensioners have faced "significant losses" since the former technology giant folded five years ago.
"From the point of view of the pensioners, this is an important issue," Paul Steep, in his initial remarks, told the two judges overseeing the cross-border bankruptcy trial.
The second day of opening arguments unfolded on Tuesday with representatives for bondholders and various international sections of Nortel's now defunct operations stepping up to the podium to make their case for a share of US$7.3 billion earned in the sale of the former technology giant's assets.
A decision is also expected on the future of 20,000 Nortel pensioners who have seen their benefits dramatically reduced since the company filed for bankruptcy in 2009.
The trial, expected to last until the end of June, is being overseen at the same time by a judge in Toronto and another in a courtroom in Wilmington, Del., via closed-circuit video feed.
The impact on pensioners has varied, with the pensions of former employees in Ontario cut by 30 to 35 per cent while, outside the province, pensions were cut by 45 per cent or more, said Anne Clark-Stewart, a spokeswoman for the Nortel Retiree and Former Employee Protection Canada, a group representing pensioners.
Health, dental and medical benefits, as well as life insurance, were all cut off in 2010, she added.
At its height from 1999 to 2000, Nortel was worth nearly $300 billion, employed more than 90,000 people globally and was regarded as one Canada's most valuable tech companies.
In 2009, the company filed for bankruptcy in North America and Europe, shedding thousands of jobs. The company was felled by changing market conditions, economic upheaval and an accounting scandal that devastated its stock price.
Since its fall, Nortel broke apart and sold off various chunks of its business, including patents and wireless technology, which are now at issue.
The cost of Nortel's demise has climbed above US$1 billion during the past five years, with legal expenses eating away at money that could be divided among the various parties.
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