TELECOM REPORTER
Courts in Canada and the United States have rebuffed a British pension regulator's attempt to drag Nortel Networks Corp. into a separate legal battle in the United Kingdom over a multibillion-dollar claim, a Nortel lawyer said, allowing the company to focus on the liquidation of its global assets.
The British Pensions Regulator had been trying to argue a $3.4-billion claim on behalf of Nortel's 40,000-plus pensioners in the U.K., where Nortel's collapse triggered a pension crisis. In a Toronto court on Thursday, lawyers for the regulator argued insolvency proceedings here under CCAA (Companies' Creditors Arrangement Act) proceedings did not prevent the collapsed telecommunications company from debating its claim before a regulatory panel in Britain.
But lawyers for Nortel's restructuring team, and the court-appointed monitor, argued that the court's stay - which allows insolvent companies to avoid being peppered by numerous lawsuits related to their demise - permitted the company to avoid such a proceeding, since it would be costly and distracting to Nortel's "skeletal" staff.
By Friday evening, the judges had reinforced the court's stay, according to Nortel's lawyers, essentially folding the pension regulator's claims back within the CCAA process, in which the regulator is merely one of many creditors, including Canadian pensioners.
