%1

Parties seeking a chunk of the $7 billion raised from the liquidation of former telecommunications giant Nortel Networks started talks yesterday aimed at ending one of the most complex and costly legal disputes in history, Reuters reported yesterday. The money has been sitting in a New York bank account since Nortel Networks global businesses were sold piecemeal after the Ontario-based company filed for bankruptcy exactly seven years ago. The talks on yesterday in New York include representatives from former Nortel operations in the United States, Canada and Europe, according to two sources who declined to be identified because the mediation was confidential. The parties had presented dramatically differing proposals to a judge in Ontario and a U.S. Bankruptcy judge in Delaware during a novel, joint trial in 2014 aimed at dividing the cash. The judges issued coordinated opinions in May that rejected the proposals from the various Nortel estates and ruled that every creditor would receive roughly 71 cents on the dollar, a position backed by some creditors. That sparked appeals. If the current talks can reach a settlement to divide the cash, it would end the appeals process. One of the big fears among the parties is that parallel appeals in the United States and Canada could result in conflicting rulings that further complicate the dispute. "It's a Charles Dickens novel," said Melissa Jacoby, a law professor and resident scholar at the American Bankruptcy Institute.

Argentine President Mauricio Macri's government starts negotiations today with creditors to end a long, bitter dispute and permit the country to tap financial markets for the first time in years, helping its battered economy recover, Dow Jones Daily Bankruptcy Review reported today. "We are ready to bring the matter to a close and negotiate a solution," Macri said yesterday. "I hope we can rapidly leave this issue behind because it limits our ability to grow." Officials will meet in New York with bondholders that had rejected previous debt restructurings following Argentina's huge 2001 default. The meeting will include Argentina's finance secretary, Luis Caputo, U.S. hedge funds that successfully sued Argentina for full repayment of the soured securities, and Daniel Pollack, a mediator appointed by U.S. District Judge Thomas Griesa, who has overseen the case. Attorneys for a group of small Argentine creditors who also won court judgments in the U.S., where the bonds were issued, are also expected to participate.

It was an astounding year on all fronts, as deal makers grew more aggressive and shareholder activism reached new heights, according to a commentary yesterday in the New York Times DealBook blog. The merger market is on track for a record $4 trillion-plus year. Shareholder activists again dominated and companies ran to do their bidding, but there were troubling signs that the reign of activists was pushing companies into risky strategies, according to the commentary. DuPont and Dow, each a target of activist hedge funds, agreed to combine in a deal where they also immediately agreed to split up into three companies. This risky bit of financial engineering promises $3 billion in savings, but the markets were lukewarm as the stock of both companies rose then quickly fell below the announcement prices. Office Depot and Staples, meanwhile, pushed by the activist hedge fund Starboard Value, agreed to a $6.3 billion combination only to be later sued by the Federal Trade Commission, which sought to block the transaction. Starboard, which orchestrated the move, has fled to the lifeboats, and has sold about half its holdings in Office Depot.

A U.S. court-appointed mediator said that Argentina's new government and holdout bondholders are to meet in the second week of January to start "substantive" talks toward settling a more than decade-old sovereign debt dispute, Reuters reported yesterday. The talks would mark a major breakthrough in the dispute, which has caused Argentina to be shut out of the international capital markets and encouraged the prior governments of both Cristina Fernandez and Nestor Kirchner to adopt unorthodox economic policies. Mauricio Macri, the first non-Peronist president in more than a decade, was sworn into office on Dec. 10. He has moved to start reversing some of the populist policies of the prior governments and said it was a priority to settle the debt issue. Daniel Pollack, a New York lawyer who is the mediator, said that he met for about one hour on Monday in his office with Argentina's newly installed finance secretary, Luis Caputo, and the vice chief of the cabinet, Mario Quintana. "The meeting was constructive, covering a range of issues, and it was agreed that they will return to New York City in the second week of January to commence substantive negotiations with the bondholders," Pollack said in a statement released through his law firm, McCarter & English.

Argentina’s incoming secretary of finance met this week with the arbiter of a bitter decade-long legal dispute between the country and a group of New York hedge funds, opening a new path toward a potential resolution, the New York Times DealBook blog reported yesterday. Luis Caputo, a former banker and soon to be the finance secretary, traveled to New York to meet with Daniel A. Pollack, a court-appointed special master who has been tasked with mediating negotiations, according to a statement from Pollack’s office. The meeting was sought by Caputo, who will begin his new role today. It follows a meeting between the group of creditors, led by the billionaire Paul E. Singer, and Pollack last week. The creditors sued Argentina seeking repayment on bonds the government defaulted on in 2001. The departing administration of President Cristina Fernández de Kirchner has balked at the creditors’ demands. While no negotiations to resolve litigation occurred in either meeting, Caputo expressed the intention of the new administration under President-elect Mauricio Macri to begin negotiations promptly once the new government is sworn in, according to the statement.

The Baha Mar resort’s Chinese lender has decided to foreclose on the $3.5 billion resort in the Bahamas and has appointed a receiver to bring the delayed project to completion, roughly six weeks after it was thrown out of bankruptcy protection in the U.S., the Wall Street Journal reported today. The move by the Export-Import Bank of China, which received Bahamian court approval to name Deloitte to the receiver role, comes a few weeks after some 2,000 employees in the Bahamas lost their jobs at the partially completed resort at the request of court-appointed liquidators. The employees had been kept on the payroll at the partially completed resort with the help of the Bahamian government.