Nortel seeks approval of $6.64 million settlement with Solus Recovery

By Mark Reccek

Bethlehem, Pa., Jan. 26 – Nortel Networks, Inc. (NNI) requested court approval of a claim settlement amounting to $6.64 million reached with Solus Recovery Fund LP, Solus Recovery Fund II Master LP, Solus Recovery LH Fund LP and Solus Core Opportunities LP, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The stipulation relates to various trade and employee-related claims, the motion noted.

Under the proposed settlement, Solus Recovery will have a general unsecured claim against NNI and Nortel Networks (CALA) amounting to $6.62 million, priority claims against NNI amounting to $11,345 and administrative claims against NNI in an amount totaling $1,085.

The motion said the stipulation “will avoid the potentially substantial and burdensome costs and risks associated with litigating the claims, reduce the potential size of claims asserted against the estate and preserve value of the debtors’ estates for the benefit of all of their stakeholders and meaningfully advance the debtors’ claims reconciliation and resolution process.”

A hearing is scheduled for Feb. 23.

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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