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A group of nearly 40 disabled or sick former Nortel workers insist that they have been shortchanged as various creditors, bondholders, pensioners and their lawyers scrabble over the carcass of Nortel, the Toronto Star reported. They argue that the decision last year to divvy up the $7.3 billion (U.S.) that Nortel left behind — as well as a prior settlement relating to the company’s Health and Welfare Trust — is grossly unfair to former employees who were on long-term disability leave when the business went bankrupt in 2009. The group is trying to pressure the Canada’s federal innovation minister to change Canada’s bankruptcy laws to give disabled people preferred status when a defunct company’s assets are divided among its creditors.

At a 2007 meeting to discuss a potential buyout of Avaya Inc., some employees of private-equity firm TPG expressed concerns that the company was at risk of becoming technologically outmoded, a “buggy-whip business,” as one put it, according to a Wall Street Journal analysis. To them, Avaya’s business of installing and managing corporate phone systems appeared vulnerable to the same forces that were making landlines scarce in households across the U.S., according to people familiar with the meeting. But their concerns, not unusual in deal deliberations, didn’t prevent TPG from partnering with Silver Lake on a roughly $8 billion deal to take Avaya private. The firms were betting that Avaya’s sales of corporate telecommunications gear would chug along while they cut costs and teed up a profitable exit. Instead, the ensuing financial crisis decimated corporate spending. And when companies started buying again, Avaya faced stiff competition from rivals Cisco Systems Inc., Microsoft Corp. and, later, from Internet-based phone services. As sales fell, Avaya began to buckle under the weight of a multibillion-dollar debt load the buyout firms layered on and pension obligations largely dating back to the company’s time as a unit of AT&T. Now Silver Lake and TPG stand to lose most of the more than $2 billion they invested in the buyout and two related acquisitions. Avaya is weighing a chapter 11 bankruptcy filing to slash its $6 billion debt load.