Sunday, October 3, 2010

Nortel US- Operating report for August on Epiq Site

Docket number 4056 on the Epiq Web site contains a filing by Nortel US on the monthly operating report from August 1-August 31, 2010.

In the report Nortel US (NNI) states that they have $1.609B in assets made up of $901M in cash $280M in intercompany accounts receivable and $428M in various other assets. NNI also shows $5.901B in liabilities of which $215M are not subject to compromise, and $5.586B are subject to compromise, per NNI’s calculations, and $82M related to discontinued operations.

Within the $5.586B subject to compromise, $3.936B is contingency liability for NNI’s debt guarantee, $427M is pension obligations, and $298M is postretirement obligations other than pension.

I presume the $427M is the shortfall in the pension fund now being administered by the PBGC, and the $298M is the non-qualified, SERP, and other excess pensions that are now part of the claims on NNI.

The PBGC claim listed in Epiq’s claims database is for $593M so there is a difference of opinion there as there probably is with all the other claims.

NNI states that as of August 31, 2010 they have received 7,389 claims asserting approximately $16.326B in aggregate outstanding liquidated claims. So far 1,364 claims have been objected to and 1,199 claims have been resolved, reducing the total by about $200M which is still a long way from what NNI estimates as the value of their liabilities subject to compromise.

In terms of the assets that have been sold, the cash received from the sales is $3.119B and is being held in escrow or in restricted cash in various Nortel entities worldwide.

The following lists the value of the various sales completed:

$1070M CDMS and LTE Access.
$924M ES including Diamondware and NGS shares.
$616M Optical and Carrier Ethernet
$234M Nortel’s share in LGN
$155M CVAS
$67M GSM North America
$21M GSM other
$18M Layer 4-7 Data
$10M Packet
$4M other

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