Ex-Nortel chief seeks €699m from bankrupt vendor

The ex-CEO of Nortel, John Roth is demanding $1 billion (€699m) from his former employer to fund his own indemnity against potential shareholder lawsuits.

Roth, who left the helm of Nortel eight years ago, filed his claims earlier this month in a bid to protect his assets against class action lawsuits, which have been on hold due to Nortel's bankruptcy proceedings.
 
The lawsuits, filed four years ago, name Roth and other executives, who allegedly  encouraged Nortel employees to continue to invest in the company's 401(k) plan despite its rapidly deteriorating state.
 
One suit claims that the defendants were "intimately familiar with the company's ailing finances" in the preceding five years but still helped and encouraged plan participants to invest in the company "despite the unsuitable nature of such an investment."
 
When Roth left Nortel is 2001 his golden handshake included $130 million in stock options, bonuses and retirement benefits.
Nortel has been selling off its assets since filing for bankruptcy protection in January and is expected to cease operations once that process is complete.
 
Sacked and retired Nortel workers who are owed unpaid pension funds and severance packages wages  are considered unsecured creditors and are at the back of the line to receive payouts from bankruptcy proceedings.

 

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