Nortel seeks advice on bankruptcy

Canadian former-giant vendor Nortel has taken legal advice about seeking bankruptcy court protection from creditors in the event its restructuring plan fails, the Wall Street Journal reports.

Ronald Alepian, a spokesman for Nortel, was quoted saying that 'no bankruptcy filing is imminent,' but added that the company has engaged several advisers to help it chart a way forward. 'We remain focused on carrying out the restructuring we outlined on November 10 to cut costs,' he said.

Alepian said Standard & Poor's in November reaffirmed Nortel's ratings, saying the company 'should be able to sustain adequate levels of liquidity in the next 12 to 18 months'.

Apparently Nortel also has been exploring requesting assistance from the Canadian government, according to the paper's sources. However last week, Prime Minister Stephen Harper shut down Parliament until late January to avoid attempts by opposition legislators to topple his Conservative government.

Nortel has also put its Metro Ethernet activities up for sale, and nearly a dozen companies and investment firms have looked at the business, the paper reported.

Bankers have encourage potential buyers to acquire the entire company, but there has been a lack of 'buyers at the right price,' one source was quoted saying.