Nortel Ex-CEO Roth Wants Protection

John Roth is long gone as Nortel Networks Ltd. CEO, but apparently he's not done asking his old companies for favors.

Roth has filed a creditor claim asking for $1 billion indemnification against shareholder lawsuits, Canada's CBC reported last night.

The claim, filed Dec. 1, would protect Roth's personal assets should the plaintiffs win certain class-action lawsuits. The suits claim that executives knew the company's finances were in trouble but still encouraged employees to keep investing in 401(k) plans.

The lawsuits are on hold due to Nortel's restructuring and bankruptcy filings, but the CBC quotes a financial analyst -- one who's been serving some Nortel ex-employees -- speculating that Roth's creditor filing means he sees the suits as a potential threat.

Roth exited Nortel in October 2001, about six months earlier than planned, during one of the steepest parts of Nortel's collapse. And he took quite a few parting gifts with him; the CBC story measures his haul at $130 million (including benefits and options), making him a ripe target if shareholders win any of those lawsuits. (See Nortel Swings Axe, Switches CEOs, Nortel's Roth Rakes It In, and The Decline & Fall of Nortel Networks.)

— Craig Matsumoto, West Coast Editor, Light Reading

COMMENTS Add Comment
inauniversefarfaraway 12/5/2012 | 3:50:46 PM
re: Nortel Ex-CEO Roth Wants Protection

A new law should be enacted called "Contempt of Society".

This law should give people the right to charge individuals based on a referendum. Penalties should also be decided within this type of forum.

When a person, such as John Roth, has exhibited such egregious behavior, it should be possible for the people to propose charging him with contempt of society. There has to be a minimum number of votes to make the results of the referendum binding. John Roth would not have any difficulty getting enough votes.

In the case of John Roth, the penalty should be forfeiture of every dollar paid to him by Nortel, including bonuses, pensions and so forth. There could be a gradation in the penalties. He should serve a jail sentence of no less than ten years.

This type of legislation would be a lot more fearsome than any law concocted by lawmakers. It should be a civil process, no lynching or capital punishement. There would be no appeal, although those found guilty would be allowed to have a referendum for their parole. The terms would be set forth in the initial referendum.

Everything could be done via the internet making it very cost effective.

Anyone in society can be charged under this law.

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