Newspaper article The Canadian Press

Lawyer for Nortel Pensioners Say Former Employee Face 'Significant Losses'

Newspaper article The Canadian Press

Lawyer for Nortel Pensioners Say Former Employee Face 'Significant Losses'

Article excerpt

Nortel pensioners faced 'significant losses':lawyer


TORONTO - A lawyer for former Canadian Nortel employees says tens of thousands of pensioners have faced "significant losses" since the former technology giant folded five years ago.

"From the point of view of the pensioners, this is an important issue," Paul Steep told the two judges overseeing the cross-border bankruptcy trial on Tuesday.

The second day of opening arguments unfolded with representatives of bondholders and various international sections of Nortel's now defunct operations stepping up to the podium to make their case for a share of US$7.3 billion earned in the sale of the former technology giant's assets.

The judges will decide how the funds are divvied up between Nortel's various international units, but will not determine how the money is then split among individual creditor groups in each location. Steep urged them not to "compartmentalize" their responsibilities and consider how their decision could also have a broader impact on each creditor groups.

The proceeding is a step towards determining the future of 20,000 Nortel pensioners in Canada who have seen their benefits dramatically reduced since the company filed for bankruptcy in 2009.

The impact on pensioners has varied, with the pensions of former employees in Ontario cut by 30 to 35 per cent while, outside the province, pensions have been cut by 45 per cent or more, said Anne Clark-Stewart, a spokeswoman for the Nortel Retiree and Former Employee Protection Canada, a group representing pensioners.

Health, dental and medical benefits, as well as life insurance, were all frozen in 2010, she added.

The trial, expected to last until the end of June, is being overseen at the same time by a judge in Toronto and another in a courtroom in Wilmington, Del., via closed-circuit video feed.

Lawyers for Nortel's former U.S. operations have argued that assets should be distributed on a "fair market value" basis, which would send most of the money stateside where the majority of the revenues would have been recognized.

Steep disagreed with those suggestions, saying the US$4.5 billion from patent sales should go to the owners, the parent company. …

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