Verizon: Nortel Sale to Avaya Imperils U.S. Security

A Delaware court is holding an emergency hearing today over concerns about the sale of Nortel Networks Corp.‘s (NT) enterprise business.

The hearing comes one day before the enterprise unit goes up for auction.

Verizon Communications Inc. (VZ) says if Avaya Inc. buys the Nortel branch, as planned, homeland security and law enforcement interests in the United States will be jeopardized, the Wall Street Journal reported.

Verizon’s rationale is this: Avaya says it won’t take on Verizon support contracts. In other words, the equipment maker allegedly will not service Verizon’s military, law enforcement, government, banking, business and hospital customers’ Nortel hardware.

In a court filing, Verizon’s lawyers wrote that if Avaya won’t maintain or repair Nortel’s CPE, “entire systems will immediately be disrupted or otherwise compromised, and in due time may cease to function entirely.”

Bankrupt Nortel’s enterprise division goes up for auction tomorrow, with Avaya slated to make the first bid. Siemens Enterprise Communications, a joint venture between Siemens and The Gores Group, is the other bidder. The winner is permitted to choose which Nortel contracts it will keep. Verizon says Avaya is refusing to take on Verizon’s contracts if it wins the auction, according to the WSJ.

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