Nortel Networks received court approval to have J.P. Morgan Chase & Co. hang on to the money generated by the sale of the bankrupt vendor's units, after Canadian regulators warned that Canadian creditors might not have access to the proceeds.
Ontario Superior Court Judge Herman Wilton-Siegel approved Nortel's request ahead of the close of its deal with Ericsson today. Nortel is expected to receive $1.13 billion for its CDMA and LTE assets from Ericsson, which bid on them in an auction in July. J.P. Morgan will hold the proceeds until Nortel's units in Canada, the United States, the U.K., Middle East and Africa work with creditors on how the money should be distributed.
The company is still devising the method for how the proceeds should be allocated. Canadian regulators argued that a proportional share of money from the asset sales should be held by Canadian banks.
Nortel is still in the process of breaking itself apart. The company has delayed the auction of its GSM/GSM-R units until Nov. 20, citing the current status of its divestitures and other asset sales.
- see this Bloomberg article
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