Nortel Networks Inc. bankruptcy


On January 14, 2009,  Nortel Networks Inc. filed for bankruptcy in United States Bankruptcy Court for the District of Delaware.  On the same day that Nortel filed in Delaware,  its parent, Nortel Networks Corporation, along with various Canadian affiliates, filed an application with the Ontario Superior Court of Justice seeking relief from creditors.  As stated in Nortel’s affidavit in support of its bankruptcy motions,  Nortel traces its origins back to the Bell Telephone Company of Canada.  In 2000, during the height of the telecommunications bubble, Nortel had 93,000 employees and annual revenue of $250 billion. 

Since the telecommunications bust, Nortel implemented several restructurings, reducing its payroll from 93,000 employees to 30,000 employees in 2008.  To reduce itself to one third of its original size, Nortel began outsourcing its manufacturing, spinning off "non-core" business and consolidating various departments, including research and development.  Despite its restructuring efforts, Nortel has been unable to keep costs below revenue for the last couple of years, which in turn led to its filing for bankruptcy. 

Continue Reading Nortel Files Bankruptcy In Delaware and Seeks Similar Relief From Creditors in Canada