Wednesday, August 19, 2009

Claims against Nortel Process - update

Today I had a helpful discussion with an attorney from Cleary Gottlieb Steen & Hamilton LLP, the law firm representing Nortel. I asked about the claims process and more specifically about what happens if there is a discrepancy. He told me that there will be omnibus hearings at which groups of creditors whose claims differ from Nortel’s will be reviewed by the court. Following these hearings a notification will be sent to the person making the claim showing the Nortel projection of the claim as compared to that submitted.

If the person submitting the claim agrees with Nortel’s estimate, I think the claim will then be fully accepted. If not, it is unclear what the next steps will be, but I think it will require some legal representation to present the basis for the claim before the court.

The NRPC-US steering committee has been negotiating with Nortel’s law firm and Segal to obtain agreement to transmit information from Nortel to Segal so that they can determine the claim amount for each individual. This process would only apply to the paying membership of the NRPC and if successful would mean that the factors used in the calculation would be agreed to before hand by Nortel’s actuaries and Segal’s actuaries. Hence the claim should be the same as what Nortel would estimate. Each individual member of the NRPC-US would have to personally file their own claims, but they will have the information from Segal to use in presenting proof of claim.

The NRPC-US have not yet finalized the details of how this would work but are working to complete the agreement and should have some information sent to their membership in the next few days. Please check for developments.

For those of you who are not paying members of the NRPC-US and who wish to participate in this process, please check the same website for information on how to join. Because of the shortness of the time frame before the bar date, Sept 30th, the NRPC-US will probably set a deadline beyond which they can’t accept any more members, so that they can have Segal complete the work. Please tell your colleagues to check or this blog to keep abreast of developments.

This is probably the best way to have a claim made on Nortel that will not be rejected in court. Let’s hope that all the details can be worked out between Nortel and Segal quickly so that we can make this process work for us.

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