Nortel suppliers concerned over bankruptcy delay

Nortel Networks has come under fire from two of its suppliers that say their interests are not being considered as the beleaguered telecom equipment maker tries to restructure under Chapter 11 bankruptcy protection.

JDS Uniphase, an optical communications technology supplier, said Nortel's restructuring will take too long and contains no protection for its suppliers.

"The four-month period for the debtors' issuance of the reclamation notice should be shortened and should terminate as of March 15, 2009," the company wrote in a filing last week. Nortel sought and received an extension of its bankruptcy protection to May 1.

JDS Uniphase also said that Nortel's decision-making during the process was too opaque, and that it was "likely to be left in limbo for four months with no benefit in information or analysis as a result." 

Andrew also said that Nortel's restructuring process was not taking the company's interests into account. Nortel said it was working to establish procedures to communicate with suppliers during its restructuring.

Nortel filed for bankruptcy in mid-January and since has exited the mobile WiMAX business, which significantly impacted the business of its partner Alvarion. The company also decided to postpone the sale of its Metro Ethernet Networks business and pledged to cut more jobs and costs.

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