(February 22, 2010) — In a Canadian court, the British pension fund regulator has filed a £2.1 billion claim against Nortel Networks, the failed telecommunications equipment producer.
With more than 43,000 pensioners, Nortel Networks filed for bankruptcy in January 2009, triggering a pension crisis in Britain, according to The Globe and Mail. Instead of restructuring its business, Nortel is auctioning off its assets to pay back debtholders, negotiating how to divide the billions it has raised so far. The British Nortel pension deficit covers more than twice the number covered by the Canadian Nortel pension fund, The Montreal Gazette reported.
A filing to an Ontario court showed the UK Pensions Regulator set a March 1 deadline for action that could lead to an order against Nortel’s assets to cover the shortfall in the British pension plan. Nortel has asked a US judge to stop the UK regulator from taking action, which could upset Nortel’s Chapter 11 exit planning.
“The monitor (Ernst & Young) is asking the court to declare that the initial order stays the commencement of these proceedings and to authorize and direct the monitor and Canadian debtors to refrain from participating in any such proceedings. Any claims the UK Pensions Regulator has should be addressed through the court-approved claims process,” Nortel said in an official statement.
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