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Nortel's share price plummets as it files for Chapter 11 protection from its creditors in Delaware bankruptcy court

Nortel Files for Bankruptcy Protection

Ray Le Maistre
1/14/2009
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Nortel Networks Ltd. has filed for Chapter 11 protection in the Delaware bankruptcy court in an effort to sort out its financial woes.

In a statement emailed to Light Reading the company noted: "Nortel today announced that it is filing for creditor protection in the US, Canada and EMEA. The company intends to emerge from this process as a more focused, financially sound and competitive Company. This is a step towards a global reorganisation of Nortel and the Company acted now because we have sufficient liquidity to both run our operations and restructure our business."

The news, though shocking, will hardly come as a major surprise as all the signs were pointing toward such an eventuality. (See Nortel's Zero Hour?, Nortel's Not Bankrupt Yet, Crunch Time for Nortel, and Nortel Culls 1,300 Jobs, Loses $3.4B.)

And, again not surprisingly, the news hammered Nortel's stock in pre-market trading, sending it down $0.25, more than 77 percent, to just $0.05.

There will be more on this story as details are announced.

— Ray Le Maistre, International News Editor, Light Reading

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Page 1 / 7   >   >>
Stevery
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Stevery,
User Rank: Light Beer
12/5/2012 | 4:14:19 PM
re: Nortel Files for Bankruptcy Protection
The only question in my head: Who's next?
HomerJ
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HomerJ,
User Rank: Light Beer
12/5/2012 | 4:14:19 PM
re: Nortel Files for Bankruptcy Protection
I hope those Nortel people like the Kung Pao chicken. They will be working for their new Chinese masters soon enough.
freetoair
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freetoair,
User Rank: Light Beer
12/5/2012 | 4:14:18 PM
re: Nortel Files for Bankruptcy Protection
is there even a Canadian in the mgmt team?
laserboy
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laserboy,
User Rank: Light Beer
12/5/2012 | 4:14:18 PM
re: Nortel Files for Bankruptcy Protection
HomerJ, with comments like your last one, you name is a perfect fit
Stevery
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Stevery,
User Rank: Light Beer
12/5/2012 | 4:14:18 PM
re: Nortel Files for Bankruptcy Protection
I hope those Nortel people like the Kung Pao chicken. They will be working for their new Chinese masters soon enough.

Perhaps. But you should notice that Nortel is about to hammer a whole lot of their weak creditors (like retirees). They have an opportunity to forge an improved cost structure, which non-Ch 11 folks will not be able to emulate.

If there's going to be a wave of reorgs, the guy who does it first is at an advantage. Whether our canuck management friends are able to capitalize on this advantage is, of course, the question.
cw.774
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cw.774,
User Rank: Light Beer
12/5/2012 | 4:14:17 PM
re: Nortel Files for Bankruptcy Protection
Well how about the mgmt team known as the Canadian Gov't?
fgoldstein
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fgoldstein,
User Rank: Light Sabre
12/5/2012 | 4:14:17 PM
re: Nortel Files for Bankruptcy Protection
homerj, what about kimchee?
Lite Rock
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Lite Rock,
User Rank: Light Beer
12/5/2012 | 4:14:16 PM
re: Nortel Files for Bankruptcy Protection
Well Nortel has been notorious for their pompous attitudes, ruthless penny pinching with suppliers, contractors, and employees. Now it continues with the further shafting of creditors, suppliers, employees and retirees.

Who's next? I say Sprint is next for Bankrupcy or aquisition. But in the long run does it really matter?
bollocks187
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bollocks187,
User Rank: Light Beer
12/5/2012 | 4:14:15 PM
re: Nortel Files for Bankruptcy Protection
once again - someone in Canada fix this once proud Company.
Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 4:14:14 PM
re: Nortel Files for Bankruptcy Protection
Canadian government pledged $30M and (probably more importantly) a helping hand in talking to the banks about post-filing financing:

http://www.lightreading.com/do...

Not a bailout ($30M, for a company that has $2.4B in cash already, seems like a token), but it sounds like they're working to make sure "Nortel," in some form, lives on.

I might be interpreting this wrong, though - anyone else have any thoughts?
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