Monday, August 17, 2009

Claims against Nortel Process

In an earlier post I stated that I had received 3 different bar-coded claim forms from Epiq last Friday. In discussions with an Epiq representative this morning (Aug 17th 2009) he told me that two of the three schedule numbers were actually just data base references and that I should file the claim with the schedule number that is listed on their docket 801. He didn’t know why I had received the additional forms but basically told me to forget about them and focus on the one that is recorded.

I took the opportunity to ask him about filing claims for health care and other benefits. He could not give me any specific direction on this, but said that if I thought that I had a claim against Nortel I should file it.

I then asked if there was a process to be followed if Nortel disputed a claim. He told me that Nortel would review all the claims and would then contact the claimant if they disagreed. I asked if any claims were ever rejected outright and he said there have been cases like that but generally the debtor (IE Nortel) would review the claim and contact the claimant if there was disagreement. Given Nortel’s lack of communications with us so far I’m not sure how that will happen.

Following my discussion with Epiq I spoke with a lawyer at Akin Gump, the court appointed legal firm representing all unsecured creditors. He said that he couldn’t give any legal advice but was willing to speak with me in an unofficial capacity and address non specific questions. I asked him about filing for health care, long term care, and insurance now, even though Nortel had not yet ceased those programs. He was not able to state directly what I should do but said that if I felt I had a claim against Nortel I should file it. I asked if Nortel would reject such claims at this point and he said that it would be up to Nortel but at least the claim would be on file.

I then asked it there had ever been a case where a new bar date had been set for different claims and he told me that he had seen that happen before. So it is possible that a different bar date would be established for claims relating to benefits other than pension, or specific compensation such as severance etc.

This chapter 11 process is intentionally vague, loose, and relaxed. Given all this lack of direct advice it seems that there is no clear process in order to keep the creditors in the dark and give the debtor an advantage. Bankruptcy is meant to help the bankrupt company not the creditor so don’t be surprised when Nortel and their lawyers present all sorts of arguments against your claim to try to avoid paying it.

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