The following story was on http://news.sympatico.ca/ - Jan. 27, 2011.
Supreme Court of Canada rejects U.K. Nortel pensioners claims in Canada
27/01/2011 6:08:00 PM
The Canadian Press
TORONTO - Canada's top court has dismissed an appeal by the U.K. Pensions Regulator that argued it should have the right to collect funds from bankrupt Nortel Networks Corp. for pensioners in Britain.
The Supreme Court of Canada said Thursday said it would not hear an appeal from the U.K. body after an Ontario court ruled against it last March.
The leave to appeal was dismissed by the Supreme Court with costs to all respondents except a group calling themselves the Former Employees and Disabled Employees of Nortel.
The U.K. pension body had attempted to force the Canadian company to pay U.K. pensioners about 2.1 billion pounds, or about $4 billion as it is permitted under that country's 2004 Pensions Act.
Nortel representatives claimed the attempt breached the terms of its creditor agreement filed in Canada, while an Ontario judge ruled that the British regulator's actions were null and void under Canadian law.
Although the U.K. statute extends beyond the British borders, Nortel's insolvency agreement was under Canadian jurisdiction and the claim did not apply, the judge ruled.
Toronto-based Nortel, once Canada's biggest technology company and one of the world's biggest telecom equipment suppliers, has been selling off most of its business under court protection since January 2009.
Nortel sought creditor protection in the United States and Canada on Jan. 14, 2009.
Saturday, January 29, 2011
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That should finalize this aspect of the situation in Canada but as far as I know the UK pension authorities are still pursuing the matter in the US. The outcome of this will make a VERY big difference in the settlement ratio.
ReplyDeleteThis was to make the total 2.1 billion pound UK pension plan protection for Nortel's UK pension underfunding considered as an administrative cost of the restructuring court, thus making it a super priority claim. This would have wiped out Nortel's Canadian estate. The UK pension protection claim for Nortel is still an unsecured claim in Nortel's CCAA court, I believe. This means that LTD and former employees are helping subsidize Nortel UK employees' pension protection, which is much richer than that for Nortel Ontario's Defined Benefit pensioners. Also, this means Nortel Canada LTD employees are subsidizing Nortel UK LTD employees' ill health pension protection, when they themselves have no LTD plan protection, since Nortel Canada's LTD plan is not structured as a pension. Nortel Canada's LTD plan
ReplyDeleteIs structured as a Nortel self-insured plan which has turned out to be essentially an insurance scam apparently blessed by the government. Bitter, you say? You bet I am.