Mediation talks on how to divide up Nortel Network Corp.’s remaining $9-billion were extended on Tuesday, as discussions that took place last week at downtown Toronto hotel continued over the phone and via e-mail.
A spokesman for Ontario Chief Justice Warren Winkler, appointed by courts in the U.S. and Canada to try to broker a deal, said Tuesday that the talks had been extended. The mediation had been set to end Tuesday, after negotiations stretched past a Friday deadline.
More than 100 lawyers, accountants and consultants spent five days in talks last week in a downtown Toronto hotel.
It was the third attempt to settle Nortel’s accounts outside a courtroom, in what has become one of the most complex – and costliest – insolvency proceeding of all time, involving companies and creditors in more than 20 countries.
The overlapping jurisdictions involved mean that the alternative to a mediated solution could be years of litigation in different countries where courts could all reach different conclusions, Justice Winkler warned in remarks he made as the mediation began last April.
The mediation pitts Nortel’s pensioners and long-term disabled former employees, who have been left with slashed benefits, against its bondholders, who have argued they are entitled to up to $1-billion in interest payments.
The talks are further complicated by the question of the competing claims between Nortel’s different entities in different countries. Its Canadian estate faces billions in claims from Nortel’s affiliates in U.S. and Europe.
Last week’s five-day mediation session came after three former Nortel executives were found not guilty of accounting fraud by an Ontario judge.