Nortel Networks Inc. (NRTLQ:US) agreed to pay $75 million to the defunct telecommunication company’s former European units to resolve claims it owes their pensioners and other creditors more than $3 billion.
Nortel and the European units must still resolve how to split up $7.5 billion the company raised by liquidating its assets after filing bankruptcy in 2009.
Ending the European claims, including a demand by a U.K. pension administrator for $2.5 billion, allows the company to move forward with distributing the cash it has raised to pay creditors, Nortel said in a filing today in U.S. Bankruptcy Court in Wilmington, Delaware.
“The settlement agreement represents a critical step forward by the parties to resolve the costly and contentious litigation amongst the Nortel affiliates,” the company said.
Nortel, based in Mississauga, Ontario, filed for bankruptcy in 2009 in Canada, the U.S., the U.K. and France, with various units under the control of separate teams of lawyers and under the jurisdictions of different courts.
The case is Nortel Networks Inc., 09-bk-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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