A final battle to recover the retirement savings of 42,000 British pensioners is poised to erupt in the next few weeks.
Former employees of Nortel, once the world’s biggest telecoms equipment manufacturers, faced the threat of losing their pensions when the firm collapsed in 2009. The remaining assets of the Canadian group have now been sold, setting off a tussle over the proceeds.
A three-way fight will be conducted at a “mediation committee” between creditors of the company’s British, Canadian, and American operations, which are all seeking a share of about $7.5 billion (£4.7 billion).
Last week, an auction of Nortel’s remaining assets — a trove of thousands of patents — fetched $4.5 billion. A consortium of technology giants, including Microsoft, Apple and the BlackBerry maker Research in Motion, paid more than five times the expected price.
The consortium, which also included Sony and Ericsson, outbid Google. Many of the patents related to mobile phone antenna technology.
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The pension representatives will tell the mediation committee that the proceeds from the sale of the assets should be used to plug the pension deficit in Britain.
Nortel collapsed in 2009 with huge debts, leaving a £2.1 billion hole in its British pension scheme, one of the biggest pension blow-ups ever seen. Frank Dunn, the former chief executive, was charged with accounting fraud in 2007 and the group never recovered.
The pensions regulator said Nortel UK was effectively controlled by the Canadian parent, which had made “little or no contributions” to the scheme between 1990 and 2002.