Nortel Pension Dispute Sent to Mediation
April 19, 2012 (PLANSPONSOR.com) - Nortel Networks Inc. won
court permission to hire a mediator to try to resolve a dispute over how to
wind down its pension plan, Bloomberg
reports.
U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, approved a 60-day mediation period, during which Nortel, once the largest telephone equipment maker in North America, must negotiate with two committees representing retirees and workers who receive disability payments.
According to Bloomberg, Nortel has spent about $20 million on retiree benefits in the past two years, company bankruptcy attorney James Bromley told Gross.
The company will eventually need to cancel the pension plan and the program under which disability payments are made to former employees.
Since filing for bankruptcy in 2009, Nortel, based in Mississauga, Ontario, has sold its major businesses and is preparing a plan to divide the proceeds among creditors.
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