Nortel Networks Corp.’s defunct U.S. unit agreed to pay bondholders as much as $1 billion to cover interest that investors claim has accrued since the former telecommunications giant filed for bankruptcy in 2009, Bloomberg reported today. The company said in a court filing yesterday that it settled a dispute with the bondholders over how much interest they can collect on $3.93 billion in debt issued in 2006-07. The agreement was announced the day before the judge overseeing the U.S. unit’s bankruptcy was scheduled to hear arguments on whether any interest should be paid and, if so, at what rate. Settling the dispute “will streamline” remaining court battles, including a fight over how to share about $7 billion in cash among creditors in the U.S., Canada and Europe, according to the filing. The case is Nortel Networks Inc., 09-bk-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).
