This week it was reported that a settlement has been reached in the bankruptcy liquidation of Nortel Networks Corp (read here). The Nortel group once was one of the world’s leading providers of telecommunications network solutions.
The insolvency of the Nortel Group was a dream for scholars of international insolvency law. Insolvency proceedings with respect to various companies were opened in multiple jurisdictions, with interested parties claiming their (fair?) share of the bounty, Nortel’s valuable IP-portfolio. Questions regarding substantive consolidation of the various estates were abound.
The Nortel case has also tested the framework of the European Insolvency Regulation. By order of 14 January 2009, the High Court of Justice of England and Wales, Chancery Division, opened main insolvency proceedings under English law in respect of all the companies in the Nortel group established in the European Union, including the French company NNSA. Secondary proceedings were subsequently opened in France. A protocol coordinating the main and secondary proceedings was signed. Notwithstanding this protocol, a bitter fight ensued. Ultimately, the Court of Justice had to intervene to determine the boundaries of both sets of proceedings, which it (unconvincingly) did (Case C‑649/13).
Tout le monde perd dans une faillite, sauf l’avocat
A long time ago, Percerou and Thaller wrote that “[t]out le monde perd dans une faillite”. This is not quite the case in Nortel, with professional fees reported to be topping $ 2 billion. Today our esteemed authors would say: “[t]out le monde perd dans une faillite, sauf l’avocat”.
Corporate Finance Lab 
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