# Nortel asset to be distributed to the pensioners in 2017r



## carverman (Nov 8, 2010)

*Nortel asset to be distributed to the pensioners in 2017*

Just got letter from the Nortel estate monitor legal firm. 
The proceeds of the Nortel assets estate to be distributed, pending approval from the general meeting of pensioners in Toronto in January 2017. 

The submitted claims will be paid out based on a approved court formula anywhere FROM 45cents on the dollar(of each claim) to as much as 49 cents, but not to exceed 50 cents on each dollar of claim in CDN funds based at the exchange rate US to CDN at the time of final court approval in spring of 2017. 

The distribution could take place as early as "sometime in April 2017", pending FINAL approval by the court (rubber stamping I would think) after approval from the pensioners at the general meeting in January ,
for the range of 45 cents to 49cents on each dollar (of claim submitted a couple years ago) to the Nortel monitor legal firm. 

Finally after 8 years, it will be over. pensioners, such as myself will receive something at least..better than nothing.

This settlement has nothing to do with the former Nortel pension, which wil be converted to an annuity sometime in 2017.


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## mrPPincer (Nov 21, 2011)

Congrats carverman!
As you say, better than nothing, I would think it's probably somewhat a good feeling to be able to finally be able to turn the page on that whole Nortel fiasco after all these years


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## james4beach (Nov 15, 2012)

Yay!


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## ian (Jun 18, 2016)

Good for you. 

Well, at least the low Canadian dollar worked for you in this final settlement. Too bad the lawyers and accountants did not take 45 cents/dollar on their billings!


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## mordko (Jan 23, 2016)

So... is this on the top of Nortel pension because the pension isn't paid in full?


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## carverman (Nov 8, 2010)

mrPPincer said:


> Congrats carverman!
> As you say, better than nothing, I would think it's probably somewhat a good feeling to be able to finally be able to turn the page on that whole Nortel fiasco after all these years


Yes, it couldn't have come at a better time as my health is declining now with the requirement to pay a PSW out of my pocket.
I have basically calculated the amount that I might get from the monitor based on the spread between 45c and 49c on the dollar.

I would expect that the "Nortel assets monitor", a Toronto legal firm, will let me know with a letter either in January after the general pensioners meeting (on the issue to vote on the acceptance matters), or later on when the final CDN court approval is granted, to begin distribution of the assets to the pensioners.
sometime (hopefully) in April or May or even after that. As long as it gets settled and I get paid what they
owe me in 2017 so I can deposit the cheque into my RRSP.


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## carverman (Nov 8, 2010)

ian said:


> Good for you.
> 
> Well, at least the low Canadian dollar worked for you in this final settlement. *Too bad the lawyers and accountants did not take 45 cents/dollar on their billings!*


yes, and lets not forget the crooked executives, that rigged the books and stole from the company.
They can be added to the list of those that purposely enriched themselves, (at the expense of others), 
grabbing what they could get in illegal bonuses from what once was a great company to work for, and at one time, the highest market capitalization company on the TSE in the 90s.


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## carverman (Nov 8, 2010)

mordko said:


> So... is this on the top of Nortel pension because the pension isn't paid in full?


Yes, this payout is on top of and separate from the Nortel pension fund issue and paid out to the creditors (pensioners included), from the liquidation sale of the former Nortel assets held in escrow...around 7.3B USD from what I heard.

A lot of the Nortel former employees and retirees were owed years of benefits when the bankruptcy occurred.
The pension fund shortfall and subsequent windup this year, is being dealt with by another firm entirely since
the remaining fund and pensioner entitlement is administered under the Ontario pension fund regulations,
at least for the employees that were working full time in Ontario. 

Nortel employees living and working in other provinces like Quebec would have a similar pension fund windup by an approved pension adminstrator in their province. 

The Ontario pension payment shortfall is PARTIALLY subsidized by the Ontario Guaranteed Pension Fund..which I'm sure, is also a creditor that has submitted a claim against the liquidated assets for pension payments paid
out so far on behalf of the Nortel pensioners. 

Any employees that were terminated AFTER the bankruptcy (probably) never received their outstanding pay or their entitled severance for the years they worked, so they would have also submitted a claim by now, of the original amount they were still owed, subject to approval by the court monitor..(the Toronto legal firm).



> The deal will see Canadian claimants collect a return of about 44 per cent on their claims, he said, which is lower than the original 71 per cent return anticipated when a deal was struck last May in U.S. bankruptcy court in Delaware and Ontario Superior Court.


https://www.thestar.com/business/20...for-73b-of-bankruptcy-liquidation-assets.html


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## livewell (Dec 1, 2013)

carverman said:


> Any employees that were terminated AFTER the bankruptcy (probably) never received their outstanding pay or their entitled severance for the years they worked, so they would have also submitted a claim by now, of the original amount they were still owed, subject to approval by the court monitor..(the Toronto legal firm).


Yes I have a couple of friends who were laid off in 2008/9 after the bankruptcy both with 20+ years of service who did not receive severance. I guess they will now get 45-49% of the amount defined by the employment standards act (Ontario) for severance - a lot less than they should have got.


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## carverman (Nov 8, 2010)

livewell said:


> Yes I have a couple of friends who were laid off in 2008/9 after the bankruptcy both with 20+ years of service who did not receive severance. I guess they will now get 45-49% of the amount defined by the employment standards act (Ontario) for severance - a lot less than they should have got.


 Well, lucky for us former employees that put in many years there, at least we have one thing to be thankful for.. unlike most companies that go bankrupt with just the machinery of operation and some office furniture that can be sold as assets to the bankrupctcy court for a few cents on the dollar.

Nortel had a few saleable assets besides the labs that were not leased. The labs at Carling in Ottawa ,would have sold to DND for a "few" hundred million in todays market. 

The valuable part of the bankruptcy was the intellectual property, the patents etc; in cell and smart phone and other digital technology, that Apple, Sony, Miocrosoft and RIM as a consortium bidding together, ( and maybe others to?) snapped up for 4.5Billion US when they saw a good deal. 

Google wanted it too, but lost out on the bidding war.



> Nortel raised around $3.2bn for creditors by selling business units since then.


https://www.theguardian.com/technology/2011/jul/01/nortel-patents-sold-apple-sony-microsoft


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## Beaver101 (Nov 14, 2011)

carverman said:


> Yes, it couldn't have come at a better time as my health is declining now with the requirement to pay a PSW out of my pocket.
> I have basically calculated the amount that I might get from the monitor based on the spread between 45c and 49c on the dollar.
> 
> I would expect that the "Nortel assets monitor", a Toronto legal firm, will let me know with a letter either in January after the general pensioners meeting (on the issue to vote on the acceptance matters), or later on when the final CDN court approval is granted, to begin distribution of the assets to the pensioners.
> ...


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## Daniel A. (Mar 20, 2011)

8 long years to sort this out, one has to wonder how many people passed away in that time waiting.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... so essentially this is payment for severance and retirees' benefits payments outstanding?


yes, unpaid severance, outstanding pay at time of bankruptcy, pensioners benefits such as health, life insurance and in my case, a signed agreement; what they called a TRB (Transistional to Retirement Benefit) that was 
SUPPOSED to be paid out in 136 installments rather than a lump sum of around $56K. 

The *TRB was equivalent to a severance payment* (golden handshake if you want to call it that), on top of my monthly pension, after 25 years of service. 
Because I was still paying alimony and had not yet advised my ex that I would be seeking a reduction in the monthly alimony payment of $1000 a month on my retirement November 2003; 

I decided to take it out in 136 payments at $576 a month (taxed income). 
It was good disposable income while it lasted from November 2003 to December 31, 2008 (50 months). 

Unfortunately because the TRB came out of Nortel's general revenue, it was never guaranteed . I WAS advised of that in the agreement that I signed with Nortel in Sept 2002 when I was given special leave of absence (due to cancer issues) and given full pay to retirement, even though I didn't need to come into work anymore until my pension kicked in November 2003 along with my TRB. payments.

Had I known they would go bankrupt 6 years later, I would have taken the lump sum offered ($56K+).... but at that time I was more concerned that with an RRSP, it would have been even more fighting with my ex in court , because her lawyer would have seen this RRSP lump sum as source of additional income to continue to pay her at the rate I was paying her at the time. 




> The former payment would be eligible for as contributions to an RRSP (amounts based on years of service pre-and-post 199?) but not sure about retirees' benefit payments. *Hopefully none of that 45c to the dollar are taxable*. ex-Nortel and pensioners will vote to settle on this since it's been a very long haul ... except for the lawyers involved.


It's ALL TAXABLE. In fact, I have received Total HWT (Health and Welfare Trust fund) paid out over 5 years: $3,296.28.

This year I applied and received $10K more from the HARDSHIP fund (which is a ONETIME PAYMENT ONLY) and the monitor withheld 20% of the $10K, so I received only $8k. 
Of course, I will include and claim the $2K of income tax withheld along with my tax on pension payments
when I file my 2016 return and get all or most of it back next year. This year I will have a lot of personal deductions to claim as well as my DTC.

According to my calculations based on my aggregate claim of $82K+,
I would be allowed somewhere between $37,143.90 at 45c on the dollar ... to.... $ 40,445.58 at 49c diff spread ; $3,301

However,* they will deduct the $13, 296.28 already paid to me* (HWT + Hardship fund) from whichever amount I will receive.

so in the end, I will only receive somwheres around:

Final lump sum payout: ($23, 847.62 , minus withholding tax (20%) = $4,769.53 ) = *$19, 078*
*payable to me* -> to be put into my new RRSP in 2017.

Or possibly if at the highest rate….

Final lump sum payout: $40,445.58 , minus withholding tax (20%) = $27, 148.72
minus withholding tax (20%) = $5429.74 ) = *$21, 719 payable to me.* put into my RRSP. 

Difference of only $2,641 in lump sum SPREAD payable to me ....after income tax withheld.


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## carverman (Nov 8, 2010)

Daniel A. said:


> 8 long years to sort this out, one has to wonder how many people passed away in that time waiting.


I imagine there has been a few..many employees working with me were older at the time I worked there, so anyone in their 80s now that had health issues... however, the settlement based on their claims while alive, (and assuming they filed their claim with the Nortel court appointed monitor about 4 years ago, WILL no doubt, be paid to their estate. 

The claims submitted are legal documents that can't be ignored by the court appointed monitor/legal firm.


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## mark0f0 (Oct 1, 2016)

What a mess. I can tell you, the number of lives messed up, not only at Nortel, but outside of Nortel due to this is enormous. I personally know a few guys who were under heavy recruitment by Nortel in the early 2000s, but still in (usually engineering) school. When the hiring freeze was applied, they weren't taken up by Nortel, and nobody else would hire them as they didn't want to deal with such employee being recruited when Nortel "inevitably" recovered. Nortel's support of Canadian academic STEM programs and research, particularly in Electrical and Computer Engineering, was significant -- funding which entirely disappeared.

Its kind of shocking that Bombardier, at least for a little while there, almost went down the same road after betting the farm on the C-Series and running into problems (many of them, such as with the engines, outside of their control!). And management/internal culture that arguably hasn't been anywhere nearly as abusive/wasteful as happened at Nortel.


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## carverman (Nov 8, 2010)

mark0f0 said:


> What a mess.
> Its kind of shocking that Bombardier, at least for a little while there, almost went down the same road after betting the farm on the C-Series and running into problems (many of them, such as with the engines, outside of their control!). And management/internal culture that arguably hasn't been anywhere nearly as abusive/wasteful as happened at Nortel.


Nortel was a good company before John Roth took over. He got greedy,over expanded, bought a lot of dotcom companies that they had no idea what they would do with these (not Nortel's line of business), 
and Nortel spent 9 billion USD on Bay networks..a second grade router company that nobody used.

They could have come up with a deal with Cisco but the negotiations fell through.
Cisco survived the 2008 recession.. Nortel Networks (which included Bay Networks) did not. 



Nortel *would have survived the 2008-2009* recession, *had it been run by honest people at the helm*..but they got used to getting paid big bonuses when the business was going well,
and they couldn't face reality in hard times, when the sales didn't justify the bonuses..so they cooked the books to continue paying themselves
big bonuses that they didn't deserve. When investors lost confidence and the stock started to fall..the market cap to finance borrowing and day to day operations was gone...there was nothing left to prop up the company.


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