Report: Nortel seeks legal counsel on bankruptcy
Nortel Networks is seeking legal advice about filing for bankruptcy to avoid its creditors in the event that its restructuring fails, according to a report in The Wall Street Journal.
Ronald Alepian, a Nortel spokesman, said that "no bankruptcy filing is imminent," but that the company was retaining several advisers to chart a way forward, and was committed to cutting costs and restructuring, which it announced it would do Nov. 10. At that time, Nortel posted a $3.41 billion loss and said it would cut 1,300 jobs in the face of challenging economic conditions. The company's market position has shriveled in recent months, as slower CDMA sales and increased competition have taken their toll.
According to the report, Toronto-based Nortel was seeking a possible bailout from the Canadian government, but the recent political upheaval there that saw the closing of the Parliament until January has thrown that plan into disarray.
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