Genband seeks damages from Nortel related to 2009 CVAS business sale

By Lisa Kerner

Charlotte, N.C., June 21 - Genband US LLC filed a complaint for declaratory relief and damages against Nortel Networks Inc. and its affiliates related to the sale of Nortel's Carrier VoIP and Application Solutions (CVAS) business, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, in December 2009 the CVAS business was sold to Genband for a purchase price of $282 million, less $100 million in balance sheet and other adjustments, or a net purchase price of $182 million.

The court approved the sale in March 2010.

Genband later disputed the calculation of the deferred profit amount figure and sought to drop the purchase price to $142.9 million.

After participating in mediation in April and engaging in arms' length negotiations, the parties agreed that Nortel would pay Genband $26,920,863.

As of May 18, four Nortel affiliates had failed to sign off on the settlement agreement. In addition, Nortel asked for changes to the settlement language, the filing said.

Genband is asking the court to enforce a settlement since the company agreed to accept a lower amount from Nortel only if it were paid promptly.

The amount of damages Genband is seeking for Nortel's breach of contract is the sum of the interest accrued on $24,905,244, the payment owed to Genband under the settlement from the date an 9019 motion should have been filed through the date such order is entered plus fees and expenses in connection with litigating the dispute.

Nortel, a Brampton, Ont.-based manufacturer and supplier of telecommunications networking equipment, filed for bankruptcy on Jan. 14, 2009. Its Chapter 11 case number is 09-10138.

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