Lawsuit alleges Nortel covered up problems

Nortel Networks has been slapped with a class-action lawsuit that alleges top executives at the equipment vendor failed to disclose last summer how poorly the company was performing in the months leading up to its bankruptcy.

The litigation, filed by Coughlin Stoia Geller Rudman & Robbins LLP in the U.S. District Court for the Southern District of New York, names Nortel CEO Mike Zafirovski and CFO Pavi Binning as defendants. Coughlin Stoia was the sole lead counsel representing the interests of former Enron investors.

The lawsuit alleges Nortel failed to disclose sluggish demand for its products and that the company's financial results were overstated. In addition, the suit claims Nortel failed to report that its restructuring was not going well.

Nortel filed for bankruptcy in mid-January, and it has been widely speculated that the company may be split up and sold in parts.

For more:
- see this article

Related Articles:
Nokia Siemens confirms interest in Nortel assets
Nortel reports $507M loss, 37% drop in revenue
Report: Nortel wants to exit LG joint venture
Nortel seeking 3-month bankruptcy extension
Nortel employees ask judge to order severance, pension payments

Suggested Articles

The C-Band Alliance (CBA) now says the U.S. could see billions of dollars going to the U.S. Treasury if its auction of C-band spectrum gets approved.

T-Mobile appears to be working to gain favor in NY, promising more jobs in new tax revenue from a second new customer experience center in the state.

Google announced it’s bringing RCS chat services to Android users in the U.S.