A court fight over more than $7 billion raised for bondholders and other creditors of Nortel Networks Corp. will be delayed unless a judge finds that European units of the defunct telephone maker filed a “frivolous” appeal, company lawyers said yesterday, according to Bloomberg News. The European units want to ask a federal appeals court in Philadelphia to force all sides into private, binding arbitration. The units, known as the EMEA debtors, plan to appeal a decision by U.S. Bankruptcy Judge Kevin Gross in Wilmington, Del., rejecting arbitration and scheduling next year’s court fight over how best to divide the cash. Once filed, the appeal may prevent parties from preparing for the court fight until the appellate panel rules, causing a delay, according to James L. Bromley, Nortel’s lead U.S. bankruptcy attorney. Nortel’s U.S. unit and its U.S. bondholders and creditors want Judge Gross to declare the appeal frivolous, a finding that would allow preparations for next year’s court fight to start. Based in Mississauga, Ontario, Nortel filed for bankruptcy in Canada, the U.S., the U.K. and France, with various units under the control of separate teams of lawyers and under the jurisdiction of different courts. The case is Nortel Networks Inc., 09-bk-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).
