Nortel Networks in Worldwide Insolvency Proceedings and Related Asset Sales

Cleary Gottlieb is lead counsel to Nortel Networks Inc. and affiliates in their U.S. Chapter 11 proceedings, which are coordinated with proceedings in Canada, the United Kingdom, France and Israel. The company commenced proceedings in three jurisdictions on January 14, 2009. Filings were made in the District of Delaware, Ontario and London. Nortel’s goal is to effectively restructure and its normal day-to-day operations are expected to continue without interruption.

In connection with this, the firm has led Nortel in sales of nine of its businesses, generating more than $3 billion in total proceeds. The sales have involved buyers and assets around the globe and were accomplished by utilizing Section 363 of the U.S. Bankruptcy Code, which, historically, has not been part of Canadian or British restructurings.

Cleary Gottlieb has represented Nortel on its Section 363 bankruptcy auction sales, including the:

• sale of its wireless infrastructure assets to Ericsson for $1.13 billion (November 2009);
• sale of its global Enterprise Solutions business to Avaya for a total of $915 million (December 2009);
• sale of its Optical Networking and Carrier Ethernet businesses to Ciena for $774 million (March 2010);
• sale of its GSM/GSM-R business in Europe and Taiwan to Ericsson and Kapsch CarrierCom for $103 million (March 2010);
• sale of its Carrier VoIP and Application Solutions to GENBAND for $282 million (May 2010); and
• sale of its Multiservice Switch business to Ericsson for $65 million (September 2010).

Nortel’s Section 363 asset sales were named Investment Dealers’ Digest’s “Telecom Deal of the Year” in 2010.

Nortel has been a client of Cleary Gottlieb for more than 20 years. A recognized leader in delivering communications capabilities across the world, Nortel does business in more than 150 countries.