The prospect of a game-changing alliance between Nortel Networks Corp.'s U.S. division and European creditors of the defunct telecommunications company has Canadian creditors worried, the Wall Street Journal reported on Saturday. Nortel U.S. and Nortel's European creditors, led by British pensioners, recently reached a partial peace over claims the Europeans had filed in the chapter 11 proceeding. The U.S. claims settlement pact includes an agreement to work toward presenting a common front in May, when Nortel's various national divisions are scheduled to fight over $7.5 billion raised in the company's liquidation. Until the agreement was reached on the U.S. claims, Nortel U.S. and the company's European creditor representatives were at odds over everything from how the cash fight should be decided — by arbitration or at trial — to how long it will take to attain finality — months or years. Now both sides say they will look for common ground and hope to hasten the day when Nortel will be able to hand out its billions to creditors around the world.
