Canadian Liberal party plans to reintroduce the bill to amend the BIA

The following summary appeared on the NRPC web site updates from the Montreal group.

"On the political scene, the Liberals have confirmed they will reintroduce the Ringuette senate bill once Parliament resumes, this bill is to amend the Bankruptcy and Insolvency Act. This bill if passed would give pensioners a more preferential position and possibly receive a greater proportion of the assets upon wind up. The Liberals have assured us that they will support the bill."

Lets hope that the conservatives waken up to the plight of Canadian retirees. There is no assurance that pensions will be paid as promised. If this amendment is not enacted it is going to lead to a major reduction in the standard of living for thousands of Canadians and undeserved suffering from worry and concern for their future. Aren't the elected officials in the governement supposed to care for the people? Seems like they only are concerned for their own pockets and staying in power. Time for a change. Vote them out at the next chance.

Canadian CBC video on Nortel pensioner's plight

On Jan. 26, 2010, CBC's The National responded to the recent web poll which wanted the CBC to ask the Government what they were going to do to protect pensions, severance and disability benefits in this time of economic turmoil and bankruptcies.

Over 64% of the nearly 11,000 respondents voted for the pension question which had been put forward by Nortel pensioner, Eamon Halpin of Whitby.

Thanks to Eamon the impact of Nortel's bankruptcy on employees, the disabled and pensioners is in the news and featured personally on the video. The video is well worth watching. Lets hope that the Canadian Government comes to its senses and enacts legislation to help pensioners,LTD and ex-employeees who have been badly hurt by companies going bankrupt.

Canada should be ashamed that it lags behind the US, the UK and many other western countries which have enacted such legislation, or provide national pension insurance.

Click on the following link to see the CBC video that was played on Jan 26th.

http://www.cbc.ca/video/#/News/TV_Shows/The_National/ID=1396663437

Canadian webinar re Nortel pension Feb 2nd 2010

The Webinar with the NRPC and the law firm Koskie Minsky is now confirmed for Tuesday, February 2nd, from 3:00 to 5:00 PM. Eastern Time.

The NRPC has already received 176 questions from 46 individuals. If you have questions to be addressed, please send them in advance to queries@nortelpensioners.ca. This e-mail address is being protected from spam bots,you need JavaScript enabled to view it .

Instruction on how to register and join the webinar will follow shortly. Hundreds of former employees found a similar webinar last August to be very valuable and this one will probably be just as beneficial to you in understanding the issues around your lost benefits, the processes involved, and what progress is being made.

Canadian Community Forums on Pensions and Retirement Security

Posted on the NRPC website Monday, 25 January 2010. For all Canadians concerned about pension issues.

A series of Community Forums are being organized to address the current pension crisis and the need for reform. The forums are open to the public, all workers, union and non-union, family members, friends and neighbors. The NRPC is encouraging your to attend and in some locations members will be addressing the forum. Federal and Provincial politicians will be invited to attend and address the forums as well.

Mark the local event on your calendar and plan to attend. Watch for updates as additional details become available.

Brampton, Ontario Feb 4 - 7pm
CAW Local 1285 Action Center, 350 Rutherford Road South, Plaza 1, Suite 6, (north east corner of Steeles and Rutherford)
Speaker is Jim Delaat (NRPC)

Toronto, Ontario Feb 11 - 1pm to 4pm
CAW Local 112, 30 Tangiers Road (Finch Ave. W. & Keele St.)

Ottawa, Ontario Feb 16
CLC
Time and Location TBA

Oshawa, Ontario Feb 16 - 7pm
Royal Canadian Legion Hall, 471 Simcoe Street South

Sudbury, Ontario February 18, 2010
Time and Location TBA

Winnipeg, Manitoba Feb 22 - 5:30pm
Union Centre, Room 2C, 275 Broadway

Brandon, Manitoba Feb 23 - 5:30pm
UFCW Training Centre, 530 Richmond Avenue E

London, Ontario Feb 23 - 7pm to 9 pm
Common Room, Tolpuddle Co-op, 380 Adelaide Street North

Sault Ste. Marie, Ontario
Date, Time and Location TBA

Windsor, Ontario
Date, Time and Location TBA
Last Updated ( Monday, 25 January 2010 )

Nortel obtains extension to Banruptcy protection for 3 months.

The following is a press release on the Nortel Website. Note the agreement included the recognition of the $2.0637B claim by NNI on NNC for errors in transfer pricing. This was part of the deal struck by the IRS to make sure that NNI pays back taxes on revenues that were transferred to the Canadian company. This will result in a dilution of the pay back (if any) to Canadian creditors.

Nortel Obtains Further Extension of Stay Period Under CCAA and Obtains Canadian and U.S. Court Approvals for Inter-Company Funding Agreement

January 21, 2010


TORONTO – Nortel Networks Corporation ("NNC") announced today that it, its principal operating subsidiary Nortel Networks Limited ("NNL") and its other Canadian subsidiaries that filed for creditor protection under the Companies' Creditors Arrangement Act have obtained an order from the Ontario Superior Court of Justice ("Canadian Court") further extending, to April 23, 2010, the stay of proceedings that was previously granted by the Canadian Court. The purpose of the stay of proceedings is to provide stability to the Nortel companies to continue with their divestiture and other restructuring efforts.

Nortel also obtained approvals today from the Canadian Court and the United States Bankruptcy Court for the District of Delaware ("US Court") of the Final Canadian Funding and Settlement Agreement, previously announced on December 23, 2009, which, among other things, provides that Nortel Networks Inc. ("NNI") will pay to NNL approximately US$190 million over the course of 2010, which amount includes the contribution of NNI and certain U.S. affiliates towards certain estimated costs to be incurred by NNL on their behalf for the duration of the creditor protection proceedings.

These approvals also allow the creation and allowance of a pre-filing claim in the Canadian creditor protection proceedings against NNL in favour of NNI in the amount of $2.0637 billion. In addition, Nortel obtained various other approvals from the Canadian Court and US Court which, among other things, authorize NNL and NNI to enter into advance pricing agreements with the U.S. and Canadian tax authorities to resolve certain transfer pricing issues, on a retrospective basis, for the taxable years 2001 through 2005

Koskie Minsky Webinar - moved to early February 2010

Notice on the NRPC website for all of you interested in the Canadian webinar.

The Webinar with our lawyers, Koskie Minsky, which had been scheduled for Jan. 28 2010, will be moved out at least a week due to the current negotiations in the CCAA Court on the Interim Funding Mechanism. As soon as a new date is confirmed, we will post it on the web site. In the interim, please continue to send in your questions for the Webinar. Sorry for this delay, but it is necessary that the lawyers focus on esolving this major issue as quickly as possible.

To help us prepare for the webcast, please submit any questions that you would like answered in advance to queries@nortelpensioners.ca This e-mail address is being protected from spam bots, you need JavaScript enabled to view it . Instructions on time and how to register and join the webinar will follow shortly. Hundreds of former employees found a similar webinar last August to be very valuable and we expect this one to be just as beneficial to you in understanding the issues around your lost benefits, the processes involved, and what progress is being made.

For your information, K.M. has objected in the Canadian court to the Canadian Funding Agreement that was mentioned in previous posts. There is concern that this might be the last payment to the Canadian group. Since the vast majority of Nortel's remaining cash resides in the USA, the UK, EMEA, and Cala the concern is that NNC will not have sufficient cash to continue operations. Since NNC is the primary group handling bankruptcy proceedings, patents, etc they will not have enough money to keep going.

Rallies accross Canada to protest Parliament's vacation

For those of you who don't know, the PM of Canada has delayed the sitting of Parliament for this year until after the Winter Olympics. This "Prorogue" as it is called, will delay further any chance we retirees have of the government addressing the BIA act. There will be rallies across Canada to protest this Prorogue. Here's the information that was posted on the NRPC site:

No Prorogue" Rallies across Canada- Jan 23, 2010

This Sat. Jan, 23, 2009, rallies will be held all across Canada to let our Government know that we are not happy with the Prime Minister's call to prorogue Parliament. While Parliament is closed, they are not dealing with many issues of importance to all Canadians, such as pension protection, white collar crime and the economy. Please go to the following web site to obtain information about the time and location of a rally near you.

http://noprorogue.ca/events/


All of you Canadian retirees and friends should come out in support of NRPC members who will be speaking at several of these rallies!

The 35th monitor report on Nortel status

The Canadian monitor Ernst & Young has issued the 35th report on the status of the Nortel restructuring and bankruptcy proceedings. The report may be seen in docket #2288 on the Epiq website.(See link on right hand column). You also can see the report at the Ernst & Young web site.

Some highlights:

Nortel is requesting an extension of the stay of proceedings until April 23rd 2010.

Nortel has $4.999B US cash of which $2.94B is in the treasury and $2.059 from sales of assets so far is held in escrow.

The following is a summary of the cash split by region.
Canada $152M
US $961M
UK/Europe $855M
Asia $824M
Cala $148M

There are various restrictions on the use of some of the cash for a variety of purposes. (see report)

Pension funding continues for both current and special service payments in the ordinary course with respect to the registered defined benefit and defined contribution plans. Funding for non-registered pension or other retirement plans is stayed.

Funding continues for the Health and Welfare Trust. $4m restricted cash is held in relation to the benefits paid through the H&WT.

A Canadian Funding and Settlement Agreement has been proposed for NNI to provide $190.8M to help continue Canadian operations.

A bargain is being worked that NNL and NNI would agree to a $2.06B claim by NNI on the NNL assets in Canada.This would be an unsecured pre-filing claim and would be part of the bargain that involves Advance Pricing Agreements between NNI and the IRS and NNL and the CRA. This is in relation to the claim by the IRS for back taxes owed by NNI due to transfer pricing errors made from 2001 to 2005.

The deal to get the funding to keep the Canadian operation going is dependent on both NNI and NNL completing these APA agreements.

Seems like the Canadian creditors are going to get hosed as a result of this bargain, but it will keep the operation going at least for another couple of months. As if it wasn't bad enough that Nortel is heading into oblivion, now our Canadian claims may be wiped out as a result of this obscene agreement. Many thanks to the CEOs and CFOs who worked the books and landed us in this mess!

All the more reason to get the Canadian government (Do they really exist? Where are they?) involved to change the BIA to give pensioners priority over other unsecured creditors. Looks like we are being out- manoeuvered by all the good old boys and good old girls in the club.

Are US claim losses tax deductible?

Like many other Nortel retirees in the US I have a claim against NNI for the money they owe me out of my non-qualified defined benefit pension. What a mouthful! One would think that a defined benefit pension would be just that, and that the payments would continue for life, or the defined period, as expected.

What a shocker when my non-qualfied pension payment stopped last February. It was supposed to be a 10 year certain payment to cover the extra pension above the IRS limit on defined pensions that Nortel owed me due to my service and salary. More like uncertain! There was never anything certain about it!

We have to wonder: "why would the IRS set a limit on pension payments?" Seems like a scam to me! It only helps the company by allowing them to pay money out of general funds instead of the pension trust fund, and that in turn means they don't have to put as much into the trust fund to cover the NQ pensions. Then when they go bankrupt they can just stop paying that money. Is there any justice or morality in that?

I was thinking about it today, since it is time once again to start working on taxes, and I came up with a thought that may be worthwhile exploring. If, when Nortel finally winds up, we only receive a percentage of our claims, is the remainder tax deductible in some way.

Let's say for instance that Nortel still owes $100,000 in a non qualified pension or severance or some other scheme, and at wind up the debts and assets are such that they can only pay 20% on the claim. The $20,000 would be paid in a lump sum and subject to income tax at a rate that is probably higher than our normal tax rate. The other $80,000 is lost forever. So I am wondering if there is some way of claiming that,( hypothetical), $80,000 as a deduction on taxes. There is probably an IRS rule against it since it was never income to start with, only a promise, but may be worth following up on.

If I discover anything on this or can get anyone to shed light on this idea, I will post what I find out at a later date.

Canadian Pension Trust Fund may not have increased in 2009.

At a meeting of the Quebec NRPC on Jan 14th 2010, a committee member asked the following question: "with the stock market surge, surely the wind up value of the pension plan must have improved ?".

Bernard Neuschwander replied that the wind up ratio has remained unchanged over the past year, primarily due to the following reasons:

Firstly because the strength of the CDN $ has offset some of the market increase as the fund is in US$ which has decreased comparatively to the CDN$.

Secondly, to protect the plan Nortel changed the plan asset mix from 60% equity & 40% long term to 30% equity & 70% long term, which offset some of the market growth.

Thirdly Nortel continue to fund the plan at the 2006 levels thus resulting in little change to the wind up ratio.

If this is the case then the funding ratio of 69% (or less) may still apply even after the market surge last year.

What a bummer!!!

New opportunity to influence the Canadian government in terms of the BIA

A situation exists which presents Nortel Pensioners with a Canadian interest a great opportunity to be heard by Canadian federal politicians.

MP Guy Lauzon (C) wrote to his constituents:

"Our government will be holding a National Caucus meeting January 22. The object of this meeting is to give Members of Parliament and Senators an opportunity to have input into the upcoming Throne Speech and to also make suggestions for inclusion in the upcoming budget.

I am asking you for your ideas and suggestions as to how the government can lay the groundwork to continue Canada's progress in dealing with the current global recession and address the temporary deficit resulting from the stimulus funding.

Prime Minister Harper and our Cabinet Ministers are meeting with major stake holders across the country but they feel it is imperative to have input from each and every Canadian."

Here is another chance to have our voices heard on the subject of the bankruptcy Insolvency Act and it's impact on pensions. I urge all retirees impacted by Nortel Canada to send a letter to the prime minister, members of parliament, and senators. Some of the people in the NRPC have constructed a sample letter shown below which you may use as a strawman.

The Sample Letter:

I am a Nortel pensioner, writing on behalf of Nortel pensioners, survivors,severed and disabled employees. We are requesting that the government amend the Bankruptcy and Insolvency Act allowing ex-employees in the above categories to receive priority over other unsecured creditors for payment of their claims.

It has been determined that the Nortel sales proceeds will be insufficient to pay for Nortel's employee benefit claims and that the cost to the Canadian governments will be in excess of $355M due to Nortel ex-employees needing to access the various social programs and paying less income taxes. When you add up the downloading by all companies in bankruptcy onto governments, the total is in the billions of dollars.

The market decline and credit default swaps,are creating undue stress on pensioners and long term disabled employees, while junk bondholders are able to use credit default swaps to pay for all of their loss from the bankruptcy filing. The junk bond owners may even double-dip to make profits from bankruptcies, first by collecting the insurance and then keeping the damaged bond and getting a higher cash settlement for it at the time of the corporation's liquidation. The bankruptcy process has changed, yet the bankruptcy laws in Canada have not adjusted. Other countries do protect pensions and other employee benefits in their bankruptcy laws, Australia moving to do so in 2005.

A study completed by Diane Urquhart(http://ismymoneysafe.org/pdf/ConsolidatedandUpdatedReport-BankrutpcyandEmployeeC\
laims-NortelCase.pdf)concludes that the impact of preferred status for pension fund deficits on the cost of credit would be minimal.

I urge you to make this change to the BIA and help protect Canadian defined pensions for those who have contributed over many years and are suffering due to the negative aspect of the current Bankruptcy Insolvency Act which favors junk bond holders over pensioners.

Yours truly,
Your Name - Phone and address

You can find the MPs and Senators at the following websites:

http://webinfo.parl.gc.ca/MembersOfParliament/MainMPsCompleteList.aspx?TimePerio\
d=Current&Language=E

http://sen.parl.gc.ca/home-e.htm

In addition the following people should also be contacted with your opinions:

Stephen Harper (Right Hon.),
Tony Clement, (Hon.),
Jim Flaherty, (Hon.),
Pierre Poilievre,
Diane Finley (Hon.),
Stockwell Day (Hon.),
Wayne Marston,
Judy Sgro (Hon.)
Senator Ringuette (Hon.),

The House of Commons Standing Committee on Finance (FINA)
James Rajotte, Chair
Massimo Pacetti, First Vice-Chair
Jean-Yves Laforest , Vice-Chair

FINA Members
Maxime Bernier (Hon.),
Robert Carrier, (Bloc Quebecois)
Bob Dechert,
Daryl Kramp,
John McKay (Hon.),
Ted Menzies,
Thomas J. Mulcair,

One Year Anniversary of Nortel filing chapter 11

Tomorrow, January 14th,2010, is the one year anniversary of Nortel filing for bankruptcy protection in the USA, Canada, the UK and other countries. One year later many of us are still wondering how it could be possible that such a great company could be brought to its knees in what seemed such a short time.

Having spent 35 years in Nortel working in Canada and the USA and seeing the breadth and depth of talent and brilliant people who made Nortel a world wide powerhouse in telecommunications, I am nothing less than astonished that this giant could be slain by a few incompetent and arrogant insiders. In retrospect, the board of directors are really the culprits for they rubber stamped the outrageous plans and programs that squandered Nortel's wealth and goodwill.

But all of that is past, and we now face a bleaker future than we ever thought was possible when we retired. Many of us have already lost money when Nortel pulled the plug on our non-qualified pension, or TRA, or severance, or health insurance , and we all worry about the final wind up and what it may mean to our claims and any pensions or coverage that is continuing today.

As we retirees and ex-employees try to rationalize the impact on our lives and standard of living, the lawyers have feasted on the money that could have gone to help our trust funds. The executives left running the company into the ground have voted themselves bonuses, and the captain who placed the company on the rocks has jumped ship in his gold plated lifeboat.

Once we all thought that Nortel was so important to Canada, that there was no way the Canadian Government would let it fall. My how we were mistaken! Not only did the Canadian Government turn a blind eye to the legal shenanigans, but they also turned their backs on the retirees. Perhaps they felt that the older vote was no longer important. Perhaps they just didn't care. It was more important to bail out General Motors than to assist one of their own corporations when it faltered. Never mind all the important contributions Nortel and it's employees had made over the years, it just wasn't politically correct to help save them.

For a while our hopes were raised that the Government might act to change the Bankruptcy Insolvency Act to place pension funds in a priority position ahead of unsecured creditors in the event of bankruptcy. But once again the powers that be, worked to oppose that possibility and have short circuited the motion and dashed our hopes.

Now we await the final act as Nortel heads to wind up this year. It's clear that our Canadian pensions will be impacted badly as the trust fund has been let dwindle, under the noses of the Canadian regulators, and the market is such that we will suffer additional losses in transferring pensions into annuities. At least in the USA and the UK the government pension insurance plans have helped out and kept many retirees afloat. But not in Canada! No, the country that takes pride in it's humanitarian culture will let the pensioners hang out to dry, because it doesn't have any form of pension insurance or protection.

Let this be a lesson to all you Canadian boomers our there approaching the golden years. You too could find yourself Nortelled by the government of the wonderful country you live in.

63 % vote for CBC to ask Canadian government about treatment of retirees

The Canadian Broadcasting Corporation is planning a set of questions for the Canadian government and have asked people to vote on the most pressing issues. You can vote at:

http://www.cbc.ca/news/yourview/2010/01/vote-what-should-cbc-news-ask-our-politicians.html

The 4th question on the list regarding the treatment of pensioners has by far the most votes with 63% responding. The questions and percentages so far are:

(1) What did the prime minister know about Afghan prisoners being transferred into unsafe Afghan prisons and when did he know it? 23% (2,410 votes)

(2 )With the government's new 'tough on crime' legislation what is the government's plan to house the influx of prisoners? 2% (207 votes)

(3) How is government listening to Canadians in advance of the new budget in March? 2% (259 votes)

(4) What will government do to protect the employees, pensioners and disabled workers who may be left without protection? 63% (6,659 votes)

(5) How does my representation in Ottawa work when there is no Parliament? 9% (999 votes)

Total Votes: 10,534

NRPC Web Seminar January 28 2010

Koskie Minsky Webinar - coming January 28, 2010

The NRPC-SRNC will be holding another webcast with the NortelCanada ex-employees legal representatives, Koskie Minsky LLP on the 28th of January 2010. To help prepare for the webcast, please submit any questions that you would like answered in advance to queries@nortelpensioners.ca

This e-mail address is being protected from spam bots, you will need JavaScript enabled to view it.

The last Web Seminar was very informative and I urge all Canadian retirees to participate. The information may also be useful for a number of US retirees and especially for those of us who have been recieving a Nortel Canada pension, or those who are entitled to receive such a pension at a future date.

The NRPC also represents ex-employees who lost severance or are on Long Term Disability so there will be discussions of those topics as well.

You can find out more at the NRPC-SNRC web site. A link is available in the right hand column.

US Proof of Claim acknowledgement

Yesterday I received a letter from Epiq Systems acknowledging that they had received my proof of claim form and that it had been recorded in the data base. The letter also stated that this does not mean acceptance of the claim, only that it had been received.

I had already checked the Epiq data base and knew that the claim had been recorded along with all the information I sent along to them.

If you have not done so already, I suggest you log on to the Epiq Website (See link on right hand column) and go to the claims portion. Enter your name in the search field and search to make sure your claim is properly recorded in the data base.

If you sent in a proof of claim and have not received a letter I suggest you call Epiq to find out why. The same advice if you have sent in a claim form and the data base does not correctly show the amount you are claiming, or is blank.

You can call Epiq at 1 866 897 6435

Motion to appoint John Ray as Nortel Network Inc. principal officer approved

Docket 2249 on the Epiq site gives more information on the appointment of John Ray as principal officer for NNI.

Extract fro the docket:

IT IS HEREBY ORDERED THAT:

l. The Motion is GRANTED as set forth herein. Pursuant to section 363 of the Bankruptcy Code, the Debtors are authoized to employ and retain John Ray as the Debtors' Principal Officer, nunc pro tunc to December 7,2009, under the terms and conditions set forth in the Engagement Letter and Motion, subject to the following terms, which apply notwithstanding anything in the Motion or any exhibit(s) related thereto to the contrary:

(a)Mr. Ray, or any affiliates, shall not act in any other capacity (for example, and without limitation, as a financial advisor, claims agent/claims administrator, or investor/acquirer) in connection with the above- captioned cases prior to the effective date of any plan or plans confirmed in these cases without further order of the Court after notice to the US Trustee and a hearing, as appropriate.

(b) In the event the Debtor(s) seek(s) to have Mr. Ray assume executive officer positions that are different than that disclosed in the Motion, or to materially change the terms of the engagement, the Debtors shall file a motion to modify the retention.

(c)Mr. Ray shall not serve as a director of any of the above-captioned Debtors prior to the effective date of any plan or plans confirmed in these cases.

(d) Mr. Ray shall file with the Court, and provide notice to the UST and all official committees, reports of compensation earned and expenses incurred on a monthly basis.

Nortel seeks Chapter 11 extension in US court.

Nortel’s lawyers have entered a motion into the court records to request that Nortel be given relief to extend its Chapter 11 protection to July 2010. The details may be found in docket #2232 on the Epiq Web site. (See the link in the right hand column).

The same motion states that NNI has named John Ray as its principal officer to help lead the next stage of the Debtors’ efforts to maximize value.

There is also information on the claims submitted (6,000 of them), and negotiations with the PBGC regarding the defined pension.

The following are some extracts from the docket:


Relief Requested
By this Motion, the Debtors seek an order pursuant to section 1121(d) of the Bankruptcy Code extending (a) the Exclusive Filing Period through and including July 13, 2010, and (b) the Exclusive Solicitation Period through and including September 13, 2010.

Facts Relevant to this Motion
The Debtors’ current Exclusive Filing Period under section 1121(b) of the Bankruptcy Code extends through February 1, 2010, and the current Exclusive Solicitation Period extends through April 2, 2010.

Since the Petition Date, the Debtors have worked diligently on a variety of fronts to administer their estates, to maximize value for their stakeholders.

Restructuring efforts. As discussed in greater detail below, the Debtors have undertaken significant steps with respect to the ultimate disposition of their assets and the transfer of substantial groups of employees to purchasers through their pursuit of business divestitures, the design and implementation of an internal reorganization to further such sales and, together with the Canadian Debtors, the restructuring of certain of Nortel’s Asia-Pacific affiliates.

At the same time, the Debtors have made substantial efforts to reduce costs, including the rejection of real property leases and contracts not necessary for their continued business operations.

The Debtors also have taken other steps to preserve and maximize value, including the development of a key employee incentive and retention plan, the resolution of significant inter-company funding and coordination issues, the prompt resolution of reclamation claims asserted by suppliers against the Debtors and the establishment of a September 30, 2009 claims bar date. Recently, after consultation with the Committee, the Bondholder Group, the Monitor and the Canadian Debtors, NNI also named John Ray its principal officer to help lead the next stage of the Debtors’ efforts to maximize value.

Additionally the Debtors have engaged suppliers and customers of Nortel’s worldwide operations in an effort to preserve the value of their business operations while divestitures are pursued. The Debtors also have actively coordinated the U.S. restructuring efforts and court proceedings with the various other multi-jurisdictional proceedings and their non-debtor affiliates, and have actively solicited input from, provided input to and coordinated restructuring efforts with the Committee, the Bondholder Group, the Monitor and the Joint Administrators.

In light of the foregoing and as described below, the Debtors have made and continue to make substantial progress toward the stated objective of value maximization. In addition, with the Sale Transactions either complete or well underway, the focus will now shift to proceeds allocation and the realization of value from Nortel’s intellectual property portfolio. These efforts will occupy the next several months, at a minimum. Given the Debtors’ successes since the Petition Date and the additional tasks to be addressed, the best interests of the Debtors, their estates, and their creditors would be well served by extending the Debtors’ exclusive periods to file a plan of reorganization and solicit support for such a plan for the reasons set forth herein.

Claims Resolution. To proceed with the development of a plan of reorganization, the Debtors will need complete and accurate information describing the nature, validity, amount and status of all claims that will be asserted against them in addition to those listed on the Debtors’ Schedules. Accordingly, the Debtors requested, and the Court ordered, the establishment of a September 30, 2009 general bar date (the “Bar Date”) for the filing of claims (other than those against NN CALA) [D.I. 1280].

On August 10, 2009, the Debtors completed mail service of notice of the claims bar dates to all known creditors. On December 3, 2009, the Court entered an order establishing January 25, 2010 as the general claims bar date for claims against NN CALA [D.I. 2059].

To date, the Debtors have received over 6,000 proofs of claim in connection with their chapter 11 cases. Since the Bar Date, the Debtors and their advisors have been taking all necessary and appropriate actions to administer the claims reconciliation process.

The Debtors have recently filed their first objections to claims [D.I.s 2188-2190] and expect to file additional objections throughout the period during which exclusivity is proposed to be extended.

The Debtors also have expeditiously resolved most of the reclamation claims asserted in these cases. Of the thirty reclamation demands made against the Debtors in these
chapter 11 cases, twenty-seven have been resolved and only three remain outstanding. Pursuant to the Order Establishing Procedures for Addressing Reclamation Demands Pursuant to Sections 105(a), 362 and 546(c) and Rule 9019 of the Federal Rules of Bankruptcy Procedure [D.I. 336], the Debtors have settled twenty demands on a consensual basis and resolved another seven demands through filing of the Debtors' Second Reclamation Notice [D.I. 756]. The Debtors are actively working to resolve the remaining reclamation demands.

Finally, the Debtors are working with the Canadian Debtors, the Monitor, the Committee, and the Bondholder Group on the development of a protocol for the resolution of claims that raise cross-border issues with the Canadian Debtors. The finalization of this protocol is a requirement of the CFA. It is possible that additional claims protocols will be developed with other jurisdictions as well.


NNI Principal Officer. On December 8, 2009, the Debtors filed a motion seeking approval of the retention of John Ray as the Debtors’ Principal Officer, nunc pro tunc to December 7, 2009 [D.I. 2095]. As described more fully in the motion, in his capacity as Principal Officer and in light of his substantial experience, Mr. Ray will provide important leadership to the Debtors as these proceedings move into the next phase. The motion on Mr. Ray’s retention is scheduled to be heard by this Court at a hearing to be held on January 6, 2010.

Other Efforts. In addition to the above, the Debtors (1) are working with the Pension Benefit Guarantee Corporation to reach agreement regarding issues related to the Debtors’ defined pension plans, (2) have filed settlements pursuant to Bankruptcy Rule 9019, and (3) have rejected several executory contracts determined to be non-essential for their continued business operations.

Accordingly, in light of the accomplishments of the Debtors thus far in these chapter 11 cases, as well as the extraordinary complexity and breadth of Nortel’s global business, further extension of the Exclusive Periods is warranted. The various matters described above, as well as various others that will require the Debtors’ attention over the next several months, will need to be resolved before the Debtors will have adequate information necessary to prepare a plan of reorganization and disclosure statement.

Kosky Minksy Webinar in January 2010

The NRPC-SRNC will be holding another webcast with our legal representatives, Koskie Minsky LLP in the second half of January 2010. The exact date and time has not been finalized. The last webinar was very useful and provided a lot of information and response to questions. Following the webinar the material and questions and answers were then published on the NRPC-SRNC website.

You are being asked to submit questions to the NRPC-SNRC in advance so that they can formulate the webcast to meet the majority of the concerns. You can submit your questions to queries@nortelpensioners.ca.

I have submitted 4 questions that are shown below for your information. I know there are a lot more questions on LTD and severance and other concerns that need to be addressed. My choice is driven from my own personal concerns, and if you feel the same uneasiness as I do perhaps you can submit your own version of those concerns to the NRPC-SNRC. I encourage everyone to submit questions on the topics that are concerning them most.

(1)

The last number quoted on the funding percentage for the Nortel Pension Trust Fund was 69%. This was only an estimate provided by Mercer. When is the proper funding assessment going to be carried out, and when can we expect to hear what the properly calculated percentage is?

(2)

What is your estimate of the percentage of Nortel assets that will be allocated to Canada. What is the total value of claims against the Canadian estate and how much will the Pension Trust Fund claim against Nortel Canada?

(3)

Can you provide a clear report on the status of political action to have the BIA changed to assist Nortel pensioners obtain priority status in terms of the Pension Fund claims? Is there hope that some action will occur on our behalf to help augment the fund and improve the percentage payout for our pensions?

(4)

Can you please provide some detail on the web site, or during the webcast regarding the process by which our pensions will be recalculated on wind up? Will the commuted value left in our pensions be the basis for the calculation? How will the administrator determine those commuted values? What interest percentage can we expect to obtain for the purchased annuities? How will the actuarial calculations reflect the fact that our original pensions were calculated on tables in place when we retired? Since some of us have been retired for a number of years, the lifetime expectancy in current tables will reflect a longer period that the original calculations and will therefore result in a lower payment from purchased annuities.