Nortel Networks Corp. says mediation to divide proceeds from the sale of the former Canadian tech heavyweight's various businesses has ended in failure.
The former telecom giant that's being dismantled under court supervision warned Wednesday that the distribution of billions of dollars to creditors and other stakeholders could be significantly delayed.
As of March 4, Nortel said it had generated $3.2-billion (U.S.) in net proceeds for its creditors from selling substantially all of its businesses piece by piece over the last two years.
Google Inc., the Internet search giant that's becoming a growing force in wireless communications with its Android operating system, has also bid at least $900-million for Nortel's patent portfolio.
Nortel's various subsidiaries and operating units are in creditor protection in Canada, the United States, Europe, the Middle East and Africa.
The parties, including unsecured creditors, bondholders and others had entered non-binding mediation to reach a settlement to all outstanding matters.
Three days of mediation ended Wednesday, five months after the first session took place.
"In light of the unsuccessful conclusion of the mediation process, delays in the ultimate resolution of allocation and inter-company claims matters potentially could be significant," Nortel warned in a statement.
"Such delays would result in a corresponding significant delay in the timing of distributions to holders of validated claims of the various estates."
Nortel said it does not expect that its common shareholders or preferred shareholders will receive any value from the creditor protection proceedings.
Nortel lost $5.1-billion last year as revenue slipped to $620-million from $3.5-billion in 2009.
It was among the world's most advanced developers of telecom equipment a decade ago. But the company was felled by changing market conditions, economic upheaval and an accounting scandal that helped batter the company's stock price.
Much of Nortel's research and development was done in Ottawa, at a centre formerly known as Bell Northern Research, although Nortel also had research operations scattered throughout the world.Report Typo/Error
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