Thursday, April 1, 2010

Monitor's 42nd report filed

Ernst & Young, the Canadian court appointed monitor of the Nortel Bankruptcy, has filed its forty second report.

The report which can be seen on the E & Y site (see right hand column), is the amended settlement agreement which was approved by Judge Morawetz yesterday.

The settlement agreement is identical to the original except that clause H2 has been removed.

Clauses E1 and H1 still remain in the agreement. These clauses basically waive the rights of pensioners and LTD people to obtain priority in the CCAA or subsequent insolvency process. We will be simply unsecured creditors like the (insured) bondholders and others. We also have given up any right to sue Nortel or directors over their poor funding and management of the pension and HWT trust funds, except in the case of obvious fraud.

So we have basically bought 6 months of continued pension and other benefits at the expense of forgoing a possible higher payout on our claims against Nortel Canada.

The decision to support this agreement has been made by the court appointed representatives of the NRPC who proceeded to these negotiations without first obtaining prior majority support by the full membership of the NRPC. In fact the agreement was obtained in secret and there was no discussion of it with the members until after it had been proposed. The only subsequent discussions were uni-directional and there was never any formal corrective mechanism for the agreement by obtaining feedback and guidance from the people being represented.

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