Wednesday, June 16, 2010

Ernst & Young report # 48 on Canadian Claims

The monitor Ernst & Young has filed a 48th report with the Canadian court listing their summary of the claims against Nortel in Canada. They also have proposed the appointment of Donald Brenner QC, Bill Horton and Andrew Diamond as claims officers to assist in the determination of any disputed claims the Monitor may refer to any one of them.

The following is a summary of claims from the report:

Claims in CAD $

Real Estate ---------- 10 claim-------- value $ 272M
Employee--------------106 claims------- value $16M
Equity ---------------127 claims------- value $11M
Late claims----------- 25 claims------- value $4M
Litigation ------------13 claims------- value $1,043M
NNI / Inter-company---- 1 claim-------- value $2,063M
Pension & Benefits---- 32 claims ------ value $7,241M
Real Estate----------- 15 claims------- value $281M
Tax & Governmental--- 18 claims------- value $2M
Trade Payables------- 416 claims------- value $7,910M
Treasury --------------21 claims------- value $10,347M
Other-----------------178 claims------- value $1,161M

Total --------------- 962 claims------- value $30,352M

I don't understand the pension and benefits claims since the claims process has not yet been established. This may be a place marker set of claims.

The claims include; Nortel Networks Corporation; Nortel Networks Global Corporation; Nortel Networks International Corporation; Nortel Networks Limited; and Nortel Networks Technology corporation.

The high value of all these claims $30,352M is very unsettling. There must be ovelaps and invalid claims in this total list. I hope that Koskie Minsky will be involved in any claims review to ensure that our claims are fully represented and that other claims are properly validated.

This shows the urgency to fix the BIA and CCAA laws. If we retirees and LTD people have to wait our turn and take what's left once the assets have been divvied up there is little hope of us getting anything to top up the underfunded trust funds. If Nortel's assets are only $6 billion world wide after all the sales, and if Canada gets allocated only $1 to $2 billion of that amount (and that is being very optimistic) then the unsecured creditors will only get 3 to 6 cents on the dollar. Which means we may get an extra 1% or so on our pension. Not much to look forward to.

1 comment:

  1. Pension & Benefits might include claims from PBGC in the US, relative to benefits payable under PBGC rules in excess of assets acquired from Northern Trust.

    Even in the US, I'd be surprised if unsecured creditors get more than 10 cents on the dollar. Very likely, they will get much less.