Ontario judge OKs up to $122.66 million for creditors of Nortel's EMEA unit

TORONTO - An Ontario judge overseeing the Canadian portion of the Nortel Networks bankruptcy has approved a settlement on one of the side issues that involves creditors of an international division of the defunct telecom equipment giant.

The agreement, which includes a number of conditional provisions, would see up to $122.66 million allocated for creditors of the former Nortel operations based in Europe, the Middle East and Africa, collectively known as the EMEA unit.

Nortel Networks UK, the main entity within the EMEA group, would be allowed a claim of at least $97.66 million against the assets of Nortel Network Ltd., the Canadian arm of the multinational company. The amount would increase by a further $25 million if complicating issues in France are resolved as outlined by the agreement.

Lawyers for the various parties said last week that they'd reached a settlement, but it required approval from the Ontario court.

The EMEA settlement also provides for various legal entities within the former Nortel organization to drop their claims against each other but leaves open the question of claims on behalf of Nortel's U.K. pension funds, another of the side issues that has complicated the final windup of what was once Canada's biggest technology company.

The settlement, reached after more than three years of negotiations and legal manoeuvres, does not resolve the larger challenge that will determine how to divide US$7.3 billion from the sale of certain parts of Nortel after it sought court protection in several countries in January 2009.

At its height from 1999 to 2000, Nortel was worth nearly $300 billion and employed more than 90,000 people globally.