Adding to their ongoing struggles, Nortel pensioners and disabled workers saw a proposed $57 million deal with the company go up in smoke. Late Friday, an Ontario judge threw it out. Judge Geoffrey Morawetz of Ontario Superior Court said the agreement was flawed and not fair to others who are still seeking money from the bankrupt telecom giant.
Among the most critical parts of the agreement was an extension of health benefits until the end of the year. This nullification means those benefits will end on Wednesday.
A controversial clause in the deal contributed to its downfall — it would have allowed the former workers to see their benefits increase with a change in federal bankruptcy laws in the future. Other creditors fought that provision, saying it created too much uncertainty.
Some ex-Nortel workers weren’t happy with the proposed deal because it didn’t protect them past the end of 2010, but nine more months probably seems like an eternity now.