November 26, 2009.
McGuinty Liberals dash hopes of Nortel Pensioners
Defeat Private Member's Bill to help protect the value of their pensions
(Queen's Park, Toronto) – The McGuinty Liberals dashed the hopes of Nortel Pensioners by defeating a Private Members Bill which was designed to help protect the value of their share of the Nortel pension plan should the plan be wound up.
Bill 213, the Pension Benefits Amendment Act (Transfers on Wind Up), 2009, introduced by Carleton-Mississippi Mills MPP Norm Sterling, would have allowed,if passed, existing Nortel pensioners or their survivors two options on the wind-up of their pension fund.
At present when a pension plan is wound up, the Financial Services Commission of Ontario (FSCO) is required to purchase a life annuity on behalf of pensioners already receiving pension benefits for the value of the pension. With interest rates low, annuities are providing low benefits. Mr. Sterling's Bill would have allowed pensioners to roll their reduced pension into an annuity or into another prescribed retirement savings arrangement.
Liberal Members who spoke to the Bill objected to it on the basis that it did not address all the problems facing Ontario's current pension system.
"It was important we pass this Bill now because the Nortel Pension Plan may be wound up before the Legislature returns in February," explained Mr. Sterling. "This was not intended to be a comprehensive solution to the need for pension reform but it was an interim measure that could have helped thousands of Nortel Pensioners across Ontario who need help now."
Mr. Sterling told the Legislature that the solution presented in his Bill was not the first choice of Nortel Pensioners, nor was it his first choice. However, FSCO, an arm's length body, makes the decision to wind up a plan when they determine that the company (in this case Nortel) will no longer survive. Since that could conceivably happen in the next few months, Mr. Sterling's Bill at least presented an option which would have helped alleviate some of the pain for Nortel Pensioners.
Ontario's approximately 12,000 Nortel pensioners are taking a double hit. Firstly the value of their pension is reduced to an estimated 69% because the plan was underfunded when Nortel filed for bankruptcy protection. Secondly their only option, a lifetime annuity, is a poor investment at this time.
"I want to thank my colleague, Mr. Sterling for bringing this bill forward," said Frank Klees, MPP for Newmarket-Aurora. "There is a matter of urgency which is why it is before the House now. We've heard honourable members make reference to the fact that pension legislation in this province should be reformed, that we need to approach pensions in a new way. That's all fine and good. But I think we missed the point of this Bill if we wax eloquent about future discussions about reforming pension plans in this province. What we need to do here is deal with a matter that is affecting people who are caught. They're caught in a circumstance beyond their control."
Mr. Sterling concluded his remarks in the Legislature with a plea on behalf of Nortel Pensioners. "Please, please give these people the opportunity to save some of their pension funds should this thing be wound down in the next two to
three months."
Despite his pleas all Liberal Members present in the Legislature voted down his Bill, leaving Nortel Pensioners literally out in the cold this winter.
Monday, November 30, 2009
Friday, November 27, 2009
Nortel gives more raises to executives
Information from Canada Broadcasting Company
Management at Nortel Networks Corp., already under fire for handing out executive bonuses, approved a plan this fall to give another round of raises to its top managers, according to an internal corporate document obtained by CBC News.
The raises, in the form of increases in salary, investments or bonuses, are part of the company's plan to retain employees as it restructures after filing for bankruptcy protection in January.
But they come at a time when many laid-off and retired Nortel employees are having to fight the company in court for their severance packages, pensions and disability payments
Former Nortel president Bob Ferchat told the CBC he was surprised at the extent to which executives at a company in bankruptcy protection were rewarding themselves.
"My reaction, frankly, to the document is 'Here we go again'," said Ferchat. "It's another round of people dividing the proceeds, eating the carcass of the company before it's even dead."
14 executives to earn over $500K
The internal document obtained by CBC outlines a new compensation scheme for 72 Nortel executives that will see them get a total of $7.5 million US on top of their current salaries in 2009.
Of those 72 executives, 14 will be getting compensation of $500,000 or more.
The biggest earner under the new compensation plan is former treasurer John Doolittle, who took over as head of the company's corporate group in August after the departure of chief executive Mike Zafirovski. Doolittle's total compensation has been bumped to $1.68 million this year, an increase of 1.12 million over 2008, when he earned $390,000 US in salary and an estimated $170,000 US in investment and bonus money.
Management at Nortel Networks Corp., already under fire for handing out executive bonuses, approved a plan this fall to give another round of raises to its top managers, according to an internal corporate document obtained by CBC News.
The raises, in the form of increases in salary, investments or bonuses, are part of the company's plan to retain employees as it restructures after filing for bankruptcy protection in January.
But they come at a time when many laid-off and retired Nortel employees are having to fight the company in court for their severance packages, pensions and disability payments
Former Nortel president Bob Ferchat told the CBC he was surprised at the extent to which executives at a company in bankruptcy protection were rewarding themselves.
"My reaction, frankly, to the document is 'Here we go again'," said Ferchat. "It's another round of people dividing the proceeds, eating the carcass of the company before it's even dead."
14 executives to earn over $500K
The internal document obtained by CBC outlines a new compensation scheme for 72 Nortel executives that will see them get a total of $7.5 million US on top of their current salaries in 2009.
Of those 72 executives, 14 will be getting compensation of $500,000 or more.
The biggest earner under the new compensation plan is former treasurer John Doolittle, who took over as head of the company's corporate group in August after the departure of chief executive Mike Zafirovski. Doolittle's total compensation has been bumped to $1.68 million this year, an increase of 1.12 million over 2008, when he earned $390,000 US in salary and an estimated $170,000 US in investment and bonus money.
Ontario Court denies appeal to lift Nortel Severance Stay
Here is the November 26, 2009 Court of Appeal of Ontario decision, which denies the lifting of the CCAA court stay to permit payment of the minimum severance that would otherwise be payable under Provincial Employment Standard Acts.
http://ismymoneysafe.org/pdf/ECOPY9MAILROOM_EXCHANGE_11262009-104054.PDF
Information Courtesy of Diane Urquhart
http://ismymoneysafe.org/pdf/ECOPY9MAILROOM_EXCHANGE_11262009-104054.PDF
Information Courtesy of Diane Urquhart
Tuesday, November 24, 2009
Nortel Break Up so far
The following information is reported on the Canadian NRPC website:
At this point Nortel has succeeded in finding buyers for the majority of the company. Here is a summary of the sell-off so far, in each case finalized by an auction process with 2 or more bidders in each auction.
1. Ericsson bought the current CDMA and future LTE wireless businesses of Nortel on July 25, for US$1.13bn. As more than one article described things, these were the crown jewels of Nortel.
2. Avaya bought the Corporate Networks division (many of us knew this as "enterprise"), on Sept. 14 for US$900million.
3. Hitachi bought some of Nortel's software and technology for next-generation packet core networks, on October 26 for US$10million.
4. Ciena just yesterday (Nov. 23), at the end of a 3-day auction process, bought Nortel's Optical Ethernet business for US$769million. This is a business in which Nortel was third in the world in sales last year, after Huawei and Alcatel-Lucent. But notably Nortel was the world leader in sales of next-generation 40 and 100 Gb systems, with about 40% market share recently from sales of a little under $1bn last year.
Still to come is the sale of Nortel's GSM business, for which Nortel said it hopes to announce a schedule later this week. One likely bidder is Nokia-Siemens, who came in a close second in bids for the first and fourth sales, for the CDMA and Optical Ethernet businesses. Nokia-Siemens are often considered anxious to become more established in the North American market, so probably remain interested in picking up part of Nortel's wireless business.
At this point Nortel has succeeded in finding buyers for the majority of the company. Here is a summary of the sell-off so far, in each case finalized by an auction process with 2 or more bidders in each auction.
1. Ericsson bought the current CDMA and future LTE wireless businesses of Nortel on July 25, for US$1.13bn. As more than one article described things, these were the crown jewels of Nortel.
2. Avaya bought the Corporate Networks division (many of us knew this as "enterprise"), on Sept. 14 for US$900million.
3. Hitachi bought some of Nortel's software and technology for next-generation packet core networks, on October 26 for US$10million.
4. Ciena just yesterday (Nov. 23), at the end of a 3-day auction process, bought Nortel's Optical Ethernet business for US$769million. This is a business in which Nortel was third in the world in sales last year, after Huawei and Alcatel-Lucent. But notably Nortel was the world leader in sales of next-generation 40 and 100 Gb systems, with about 40% market share recently from sales of a little under $1bn last year.
Still to come is the sale of Nortel's GSM business, for which Nortel said it hopes to announce a schedule later this week. One likely bidder is Nokia-Siemens, who came in a close second in bids for the first and fourth sales, for the CDMA and Optical Ethernet businesses. Nokia-Siemens are often considered anxious to become more established in the North American market, so probably remain interested in picking up part of Nortel's wireless business.
Monday, November 23, 2009
NORTEL SELECTS CIENA AS SUCCESSFUL BIDDER FOR OPTICAL NETWORKING AND CARRIER ETHERNET BUSINESSES
NORTEL SELECTS CIENA AS SUCCESSFUL BIDDER FOR OPTICAL NETWORKING AND CARRIER ETHERNET BUSINESSES
November 23, 2009
Ciena emerges as winning bidder with a purchase price of US$530 million in cash plus US$239 million principal amount of convertible notes
A minimum of 2,000 Nortel employees will be offered the opportunity to continue their work at Ciena
U.S. and Canadian court approvals of sale will be sought at a joint hearing on December 2, 2009
U.S. and Canadian antitrust clearance for the sale already obtained
TORONTO - Nortel* Networks Corporation [OTC: NRTLQ] announced that it, its principal operating subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), have concluded a successful auction of substantially all of the assets of Nortel's global Optical Networking and Carrier Ethernet businesses. Ciena Corporation (Ciena) has emerged as the winning bidder with a purchase price of US$530 million in cash plus US$239 million principal amount of convertible notes due June 2017.
The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on December 2, 2009, and in France and Israel. The sale is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments. U.S. and Canadian antitrust clearance for the sale has already been obtained. Nortel will work diligently with Ciena with a target to close the sale in the first quarter of 2010, subject to the timing of obtaining other regulatory approvals.
If approved by the courts, Ciena's purchase will include substantially all product platforms, patents and intellectual property that are predominantly used in the businesses, and provides for the transition of substantially all of Nortel's Optical Networking and Carrier Ethernet customer contracts to Ciena.
A minimum of 2,000 Nortel employees will receive offers of employment from Ciena, which currently represents more than 85 percent of the global Optical Networking and Carrier Ethernet employee base. This includes those employees assigned to the Optical Networking and Carrier Ethernet businesses in certain EMEA jurisdictions who will transfer automatically to Ciena by operation of law.
“Uniting our two optical businesses is a game changing event for the optical industry, creating a leader that has the end-to-end portfolio, industry innovation leadership, and significant global customer base to succeed in today's highly competitive market,” said Philippe Morin, president, Metro Ethernet Networks, Nortel. “Ciena's commitment to the future of our product platforms, customers and employees represents an exceptionally positive outcome to a challenging journey that started over a year ago. Our employees have always been the core value of our business, and their ability to continue to innovate as part of a global industry leader is one of the most satisfying results of today's news.”
“Nortel's Optical and Carrier Ethernet assets are well-respected in the industry, as evidenced by strong customer relationships across the globe,” said Gary Smith, president and CEO of Ciena. “By combining these assets with Ciena's existing resources, our collective customer base will be able to rely on one of the largest and most innovative companies strategically focused on converged Ethernet networking.
As previously announced, Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.
November 23, 2009
Ciena emerges as winning bidder with a purchase price of US$530 million in cash plus US$239 million principal amount of convertible notes
A minimum of 2,000 Nortel employees will be offered the opportunity to continue their work at Ciena
U.S. and Canadian court approvals of sale will be sought at a joint hearing on December 2, 2009
U.S. and Canadian antitrust clearance for the sale already obtained
TORONTO - Nortel* Networks Corporation [OTC: NRTLQ] announced that it, its principal operating subsidiary Nortel Networks Limited (NNL), and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), have concluded a successful auction of substantially all of the assets of Nortel's global Optical Networking and Carrier Ethernet businesses. Ciena Corporation (Ciena) has emerged as the winning bidder with a purchase price of US$530 million in cash plus US$239 million principal amount of convertible notes due June 2017.
The sale is subject to court approvals in the U.S. and Canada, which Nortel will seek at a joint hearing on December 2, 2009, and in France and Israel. The sale is also subject to certain regulatory approvals, information and consultation with employee representatives and/or employees in certain EMEA jurisdictions, other customary closing conditions and certain post-closing purchase price adjustments. U.S. and Canadian antitrust clearance for the sale has already been obtained. Nortel will work diligently with Ciena with a target to close the sale in the first quarter of 2010, subject to the timing of obtaining other regulatory approvals.
If approved by the courts, Ciena's purchase will include substantially all product platforms, patents and intellectual property that are predominantly used in the businesses, and provides for the transition of substantially all of Nortel's Optical Networking and Carrier Ethernet customer contracts to Ciena.
A minimum of 2,000 Nortel employees will receive offers of employment from Ciena, which currently represents more than 85 percent of the global Optical Networking and Carrier Ethernet employee base. This includes those employees assigned to the Optical Networking and Carrier Ethernet businesses in certain EMEA jurisdictions who will transfer automatically to Ciena by operation of law.
“Uniting our two optical businesses is a game changing event for the optical industry, creating a leader that has the end-to-end portfolio, industry innovation leadership, and significant global customer base to succeed in today's highly competitive market,” said Philippe Morin, president, Metro Ethernet Networks, Nortel. “Ciena's commitment to the future of our product platforms, customers and employees represents an exceptionally positive outcome to a challenging journey that started over a year ago. Our employees have always been the core value of our business, and their ability to continue to innovate as part of a global industry leader is one of the most satisfying results of today's news.”
“Nortel's Optical and Carrier Ethernet assets are well-respected in the industry, as evidenced by strong customer relationships across the globe,” said Gary Smith, president and CEO of Ciena. “By combining these assets with Ciena's existing resources, our collective customer base will be able to rely on one of the largest and most innovative companies strategically focused on converged Ethernet networking.
As previously announced, Nortel does not expect that the Company's common shareholders or the NNL preferred shareholders will receive any value from the creditor protection proceedings and expects that the proceedings will result in the cancellation of these equity interests.
Saturday, November 21, 2009
Canadian Survey on Pensions
The Hon. Judy Sgro, Liberal Seniors andPension Critic, has posted an online survey asking the Canadian public to provide input to help the Liberal party devise policy directives related to pension and retirement income systems.
http://survey.liberal.ca/s.aspx?sm=8pZJLFbbU_2b9_2fns7LnC_2fetw_3d_3d
There is even a question about protection of pension benefits after bankruptcy.
http://survey.liberal.ca/s.aspx?sm=8pZJLFbbU_2b9_2fns7LnC_2fetw_3d_3d
There is even a question about protection of pension benefits after bankruptcy.
Wednesday, November 18, 2009
NORTEL COMPLETES SALE OF CDMA BUSINESS AND LTE ACCESS ASSETS TO ERICSSON
• FOLLOWING SATISFACTION OF ALL CLOSING CONDITIONS, SALE IS EFFECTIVE END OF DAY NOVEMBER 13, 2009
• MORE THAN 2,500 NORTEL EMPLOYEES ARE JOINING ERICSSON
November 13, 2009
TORONTO – Nortel* Networks Corporation [OTC: NRTLQ] announced today that it, its principal operating subsidiary Nortel Networks Limited, and certain of its other subsidiaries including Nortel Networks Inc., have completed the sale of substantially all of Nortel’s CDMA Business and LTE Access assets to Telefonaktiebolaget LM Ericsson (Ericsson) for a purchase price of US$1.13 billion. The sale was subject to court approvals in the U.S. and Canada as well as regulatory and other customary closing conditions. These conditions have now been satisfied and the sale was concluded effective today.
"Completion of this first large-scale divestiture is a major milestone in Nortel’s plan to preserve the value of its innovation and know-how while maximizing value through the sale of its businesses," said Pavi Binning, Chief Restructuring Officer, Nortel. "As we stated following July’s auction, the sale of our CDMA business and LTE Access assets to Ericsson represents a very positive prospect for our customers, our employees and for many of our other stakeholders. Our customers will benefit from having an experienced and financially strong partner supporting their CDMA and future LTE networks, while more than 2,500 skilled employees will now have new opportunities with a world-class technology company."
Under the terms of the sale, Nortel will provide transitional services to Ericsson, and Ericsson will provide products and services to Nortel in support of those CDMA customers remaining with Nortel.
• MORE THAN 2,500 NORTEL EMPLOYEES ARE JOINING ERICSSON
November 13, 2009
TORONTO – Nortel* Networks Corporation [OTC: NRTLQ] announced today that it, its principal operating subsidiary Nortel Networks Limited, and certain of its other subsidiaries including Nortel Networks Inc., have completed the sale of substantially all of Nortel’s CDMA Business and LTE Access assets to Telefonaktiebolaget LM Ericsson (Ericsson) for a purchase price of US$1.13 billion. The sale was subject to court approvals in the U.S. and Canada as well as regulatory and other customary closing conditions. These conditions have now been satisfied and the sale was concluded effective today.
"Completion of this first large-scale divestiture is a major milestone in Nortel’s plan to preserve the value of its innovation and know-how while maximizing value through the sale of its businesses," said Pavi Binning, Chief Restructuring Officer, Nortel. "As we stated following July’s auction, the sale of our CDMA business and LTE Access assets to Ericsson represents a very positive prospect for our customers, our employees and for many of our other stakeholders. Our customers will benefit from having an experienced and financially strong partner supporting their CDMA and future LTE networks, while more than 2,500 skilled employees will now have new opportunities with a world-class technology company."
Under the terms of the sale, Nortel will provide transitional services to Ericsson, and Ericsson will provide products and services to Nortel in support of those CDMA customers remaining with Nortel.
Wednesday, November 4, 2009
Canadian Bill to adjust the BIA to help pensioners.
All the efforts by the Canadian retirees is beginning to have an effect. Mr. Wayne Marston (Hamilton East—Stoney Creek, NDP) moved for leave to introduce Bill C-476 to the Canadian Parliament. This is an Act to amend the Bankruptcy and Insolvency Act and other Acts (unfunded pension plan liabilities).
The following is a transcript of what he said:
Mr. Speaker, I am pleased to rise today to table my latest bill in an ongoing effort to protect the pension plans of hard-working Canadians. The official name of my bill is an Act to amend the Bankruptcy and Insolvency Act and other acts. In 1927, it was J.S. Woodsworth, the leader of the CCF, who introduced Canada's first pension legislation, the old age security pension, as a way to address seniors' poverty. It was adopted by the minority Liberal government of the day. In the mid-1960s, again it was the NDP member, Stanley Knowles, who forced the minority Liberal government of Lester Pearson to adopt CPP, again to further address seniors' poverty.
Clearly it has been and remains the NDP that has shown the way on pension reform in Canada, and we continue that work with the tabling of this significant bill. I refer to my bill as the Nortel bill, because it would address in a real way the very serious situation these workers find themselves in as Nortel goes through the CCAA process. The Nortel bill amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, among others, to ensure companies make good on their unfunded pension liabilities. The Nortel bill classifies these unfunded pension liabilities as preferred creditors and places them on the same tier as other secure debt to bondholders, investors and other such creditors. It is designed to prevent speculators from buying up assets on the cheap while leaving pension funds gutted and workers without the benefits they have earned.
In addition, the Nortel bill, through new procedures, helps former employees of bankrupt corporations to claim moneys owed. The bill also ensures that payouts resulting from bankruptcy will not be deducted from employment insurance benefits. Finally, unlike the situation with current pension protections, there is no cap on the amount of benefits protected. It would not be retroactive, meaning that for Nortel to benefit, a judge would need to order that the liquidation be conducted under the BIA.
Having consulted for many months with seniors' pension experts, I know the bill would give security and peace of mind to millions of Canadians.
(Motions deemed adopted, bill read the first time and printed)
http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4199760&Language=e&Mode=1
The following is a transcript of what he said:
Mr. Speaker, I am pleased to rise today to table my latest bill in an ongoing effort to protect the pension plans of hard-working Canadians. The official name of my bill is an Act to amend the Bankruptcy and Insolvency Act and other acts. In 1927, it was J.S. Woodsworth, the leader of the CCF, who introduced Canada's first pension legislation, the old age security pension, as a way to address seniors' poverty. It was adopted by the minority Liberal government of the day. In the mid-1960s, again it was the NDP member, Stanley Knowles, who forced the minority Liberal government of Lester Pearson to adopt CPP, again to further address seniors' poverty.
Clearly it has been and remains the NDP that has shown the way on pension reform in Canada, and we continue that work with the tabling of this significant bill. I refer to my bill as the Nortel bill, because it would address in a real way the very serious situation these workers find themselves in as Nortel goes through the CCAA process. The Nortel bill amends the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, among others, to ensure companies make good on their unfunded pension liabilities. The Nortel bill classifies these unfunded pension liabilities as preferred creditors and places them on the same tier as other secure debt to bondholders, investors and other such creditors. It is designed to prevent speculators from buying up assets on the cheap while leaving pension funds gutted and workers without the benefits they have earned.
In addition, the Nortel bill, through new procedures, helps former employees of bankrupt corporations to claim moneys owed. The bill also ensures that payouts resulting from bankruptcy will not be deducted from employment insurance benefits. Finally, unlike the situation with current pension protections, there is no cap on the amount of benefits protected. It would not be retroactive, meaning that for Nortel to benefit, a judge would need to order that the liquidation be conducted under the BIA.
Having consulted for many months with seniors' pension experts, I know the bill would give security and peace of mind to millions of Canadians.
(Motions deemed adopted, bill read the first time and printed)
http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=4199760&Language=e&Mode=1
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