A federal court in Canada this week gave Nortel Networks yet more time to restructure.
Nortel said on Wednesday it now has until July 22 to work out a plan to pay creditors. Nortel has made more than $3 billion in the past year by auctioning its various divisions; still, it holds $4.5 billion of long-term debt and owes billions more to suppliers, partners, pensioners and even to Texas Stadium, home of the Dallas Cowboys.
The latest report from Nortel’s court monitor, Ernst & Young, shows the bankrupt telecom equipment maker held about $251.2 million in cash, $56.8 million of which is restricted. Presumably Nortel will use some of the cash to make good on its intent to pay about $97 million over the next two years to certain workers who stay with the company as it winds down operations.
Nortel filed for bankruptcy protection in January 2009 after years of financial troubles caused in part by the tech bust and a highly publicized accounting scandal. Over the past year, judges have continued to give the company additional months for restructuring efforts. Nortel said it needs the stability so it can keep selling assets; but after getting rid of its wireless, enterprise and Ethernet divisions, Nortel’s most valuable resources are its patents. And analysts have said Nortel needs to sell those patents right away or risk their losing value as protections come close to expiring.