Nortel Estate Successfully Defends Against $73 Million Claim Increase

June 29, 2017

Cleary Gottlieb recently secured a victory for its client Nortel Networks Inc. in the U.S. Bankruptcy Court for the District of Delaware, preventing claimant SNMP Research International Inc. (SNMPRI) from amending its claim against Nortel to increase its alleged damages by more than $73 million.

Prior to Nortel’s bankruptcy, SNMPRI provided certain software tools to Nortel pursuant to a license.  Following Nortel’s bankruptcy filing in 2009, SNMPRI sought approximately $22,000 in purportedly unpaid contractual royalty amounts.  In the years that followed, SNMPRI repeatedly asserted increasing contractual amounts allegedly owed—peaking at over $8 million in 2015.

In 2016, seven years after the deadline to file new claims, SNMPRI attempted to assert new claims, add a new claimant and increase the asserted damages by over $73 million. Following a May 2017 hearing, the Bankruptcy Court issued a ruling on June 29, 2017, that denied in its entirety SNMPRI’s requested amendment—shielding the Nortel estate from the prejudice, cost and burden of defending against a new and dramatically inflated claim.