Mediation extended in fight over $9 billion in Nortel assets

Reuters News
Posted: Jan 22, 2013 8:11 PM

(Reuters) - A mediator overseeing creditor negotiations in Nortel Networks' bankruptcy said on Tuesday he is extending talks over how to distribute about $9 billion in cash at the fallen telecom.

Ontario Chief Justice Warren Winkler said in a statement the mediation, scheduled to end at noon on Tuesday, had been extended, but did not say for how long.

A spokesman for the mediator declined to give detail on the length of the extension.

Nortel, once the largest telecoms equipment maker in North America, filed for bankruptcy in 2009, hampered by accounting problems and failing to recover from the burst of the 1990s tech bubble. It went on to raise $9 billion after selling its assets, but never resolved how to divide the value among creditors in Canadian, U.S. and European insolvency proceedings.

Winkler, as mediator, has been trying to reach a settlement to allocate that money through more than a week of talks in a Toronto hotel.

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Dividing the money has proven a vexing exercise, one Winkler called "one of the most complex transnational legal proceedings in history.

(Reporting by Nick Brown in New York and Tom Hals in Wilmington, Delaware; Editing by Lisa Shumaker)