Bankruptcy courts in the United States and Canada approved Ericsson's $1.13 billion bid to acquire Nortel Networks' CDMA and LTE assets at a hearing yesterday, setting the stage for the conclusion of a months-long saga involving the fate of a once-mighty equipment vendor. However, the Canadian government can still potentially intervene in the matter, though it remained unclear whether it would.
Losing bidders and Nortel creditors can appeal the court's decision for up to 21 days. And while the prospect of Canadian intervention hangs in the air, one of the bankruptcy judges overseeing the proceedings praised the bidding process. Nortel first entered bankruptcy protection in January.
"It's rare for a bankruptcy judge to allow himself to be enthusiastic, but I'm enthusiastic about this process,"said U.S. Bankruptcy Judge Kevin Gross in Wilmington, Del.
Research In Motion, which has urged the Canadian government to act against the transaction, did not attend the court hearing and did not file an objection to the bidding process. Ahead of the hearing, the Canadian government was still mulling its options. Under the Investment Canada Act, Canada has the power to block a foreign investment because of national security.
Canadian Industry Minister Tony Clement can review the deal at his discretion, and, according to the law, cannot comment until that review is complete. "We will be mindful of the (21-day) appeal process as well as our ICA (Investment Canada Act) process," Darren Cunningham, a spokesman for Clement, told Reuters. "Our hope is that these processes and any other potential regulatory checks could run concurrently."
- see this Reuters article
- see this FT article
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