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Judges in the U.S. and Canada rejected proposals backed by warring creditors of Nortel Networks Corp. for dividing more than $7 billion in cash, causing bonds of the defunct telephone maker to plunge.
The filings say the proportional distribution would wind up giving all the creditors about 71 per cent of the return on their claims.
The decision was reached after months of courtroom battles last year over Nortel’s remaining assets, which mostly came from the sale of certain parts of the company when it folded.
The former technology giant 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, the proceeds of which were the main issue of the court hearings.
Agencies/Canadajournal
