| WILMINGTON, Del.
WILMINGTON, Del. Oct 13 The U.S. government's
pension insurer said on Thursday it opposed a deal to divvy up
$7.3 billion left from the liquidation of Nortel Networks,
potentially complicating efforts to end a seven-year battle over
The Pension Benefit Guaranty Corp, an independent federal
agency, said it did not support an agreement reached Wednesday
because it would not receive the entire $708 million it says it
James Bromley, an attorney for Nortel, said he was
disappointed in the agency's opposition. "They know full well
this is an appropriate and reasonable settlement."
Nortel stumbled from ranking among the world's most valuable
companies during the 1990s Internet bubble to bankruptcy in 2009
The sale of Nortel's businesses raised billions of dollars,
and Wednesday's agreement divided that cash among former Nortel
businesses in Canada, the United States and Europe, ending years
of cross-border court fights.
The PBGC was not a party to the settlement, which is subject
to court approval in the United States, Canada and other
The agency's claim stems from the termination of Nortel's
underfunded pension plan in 2009, which at the time had 22,000
The PBGC said it did not expect the settlement or its
opposition to the deal to impact benefits for participants in
the terminated Nortel pension plan. The agency said if its claim
is not fairly resolved, however, companies that pay a premium to
the PBGC to fund the agency will have to "shoulder a greater
burden in the coming years."
Wednesday's settlement will distribute cash that has been
tied up for years in court fights, but not everyone was happy.
An adviser to a group of about 60 Nortel long-term disabled
employees in Canada said her group also opposed the settlement,
which would pay them about 40 percent of what they are owed
while bondholders are likely to collect 90 percent.
"Bringing a mess to an end is a mess that never should have
occurred," said Diane Urquhart, an independent financial analyst
who has been working with the long-term disabled former Nortel
employees in Canada.
Still, Urquhart doubted the small group would be able to
derail the settlement, which also distributes cash to more than
20,000 Nortel retirees in Canada.
An official representative of the larger group of about 350
long-term disabled former employees in Canada signed onto the
(Reporting by Tom Hals in Wilmington, Delaware; editing by