Ontario’s top court has dismissed a motion by several parties involved in a long-standing dispute over $9-billion in residual assets of former technology giant Nortel Networks.
A three-judge panel from the Ontario Court of Appeal ruled this week that a joint, cross-border trial should be permitted to go ahead.
The Joint Administrators of Nortel Networks UK Ltd., along with 24 debtors from around the world, had argued that the planned trial by the Ontario and Delaware courts was “a violation of the Ontario court’s independence and sovereignty and will be fraught with irresolvable procedural and substantive problems.”
They also argued that further attempts should be made to mediate using private arbitration, rather than a mandated court proceeding.
But the court ruled that legally, the parties had met their obligation by attempting to solve this matter through arbitration, and were not necessarily obligated to resolve it through that process.
“Granting leave to appeal would impose additional costs and threaten further delay in proceedings that have already experienced too much of both,” said the decision.
More than 100 parties, including ex-workers, bondholders, trade creditors and governments worldwide are involved in the complex legal battle over how to divvy up as much as $9-billion of the former telecom equipment maker’s residual assets.
In January, a mediation process held in Toronto abruptly ended after Ontario Chief Justice Warren Winkler, who was overseeing the two-week long proceeding, concluded there was no resolution in sight. Three other attempts at mediation had also failed.
It’s been reported that the proceedings have cost up to $755-million worldwide in lawyer fees since the negotiations begun. A group representing disabled ex-Nortel employees says that figure is closer to $861-million.
In March, an Ontario judge and an U.S. judge agreed to go ahead with the Canada-U.S. trial. It was expected to begin as early as the fall.
At its height in 1999 to 2000, Nortel was worth nearly $300-billion, employed more than 90,000 people globally and was regarded as one Canada’s most valuable companies.
In 2009, the company filed for bankruptcy in North America and Europe, shedding thousands of jobs.
Earlier this year, three former top executives at the firm were acquitted of fraud charges nearly a decade after being accused of falsifying financial records at the beleaguered company. The Crown had alleged that the three had been involved in a book-cooking scheme to trigger $12.8-million in bonuses and stock payments for themselves.Report Typo/Error