Nortel Networks, which filed for bankruptcy protection last month, has won court approval to begin paying tens of millions of dollars worth of incentive bonuses to top executives and other employees in an effort to help keep them from leaving the company.
The move comes despite a recommendation by Nortel's board last month that bonuses should not be paid for last year.
A Bloomberg report, said Nortel has been cleared to pay US$22 million in bonuses to 880 employees. Meanwhile, the vendor is also reportedly seeking a further US$23 million to pay 92 senior executives who can help pull the company out of its restructuring. Nortel will go back to court later this month for approval of those payments.
Last week Nortel's chief executive Mike Zafirovski told the Financial Times (FT) that the company hopes to complete its reorganisation plans and emerge from bankruptcy protection before mid-year, despite a fourth-quarter increased loss of US$2.14 billion.
The restructuring should be submitted to the board and other stakeholders towards the end of this month. If approved, it will be the first step towards Nortel emerging from bankruptcy protection
CFO Pavi Binning has been appointed chief restructuring officer and Nortel plans to cut around 5,000 jobs to save money.