Circuit court grants leave to appeal Nortel Networks allocation orders

By Caroline Salls

Pittsburgh, Aug. 10 – Court orders related to the allocation of Nortel Networks, Inc. sale proceeds can be appealed, according to orders entered Wednesday by the Court of Appeals for the Third Circuit and filed with the U.S. Bankruptcy Court for the District of Delaware.

In May, the U.S. District Court for the District of Delaware certified the appeal requests directly to the Third Circuit court, saying it would be up to the circuit court to decide whether it wants to take up the disputes about allocation now, or whether it would prefer these issues to remain before the district court for the additional time it would take the latter to make and articulate its decision.

“Under the circumstances as they now exist, the court cannot escape the conclusion that these matters of public importance may be materially advanced by certification of direct appeal,” U.S. district judge Leonard P. Stark said in his May ruling.

“The issues merit careful consideration – a process this court is not in a position to complete for at least several more months. Moreover, this court is not empowered to provide a final, non-appealable resolution of the issues. Only a higher court can do so.”

As previously reported, the U.S. and Canadian courts overseeing Nortel’s cases agreed in 2015 orders that the $7.3 billion in asset sale proceeds should be allocated on a pro rata basis among the various Nortel debtor estates.

According to Wednesday’s orders, once all appeals have been opened, the circuit court will schedule a management conference related to the briefing.

Nortel, a Brampton, Ont.-based manufacturer and supplier of telecommunications networking equipment, filed for bankruptcy on Jan. 14, 2009. Its Chapter 11 case number is 09-10138.

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