The auction of Nortel Network’s enterprise unit was stalled on Friday night due to renewed complaints from Verizon Communications, Nortel’s biggest customer.
The two lead bidders in the auction Avaya and Siemens Communications Systems started the bidding on Friday afternoon, but were halted as a US bankruptcy court dealt with Verizon’s application to cross-examine Avaya officials, the Ottowa Citizen.
Verizon claimed that should Avaya win the auction key Nortel service deals with US defence agencies could be cancelled, threatening US national security.
While the court set aside the claims for now it retains the power to approve the sale process once the auction is over, at which time Verizon can raise its concerns.
“Communications networks critical to the operation of the Federal Government, and the defence, safety, health and security of the American public are at risk,” Verizon stated in its filing to the court.
Avaya had issued a statement to the media on Friday stating it was committed to providing current and future customers with service and support as it pursues the acquisition of Nortel Enterprise Solutions.
Local media reports claim that the auction started Friday evening and extended until about 6 am local time Saturday. The auction and related discussions resumed in the afternoon and continued into the evening Sunday.
A Nortel spokesman told telecomseurope.net the auction would continue on Monday.