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Judges in Canada and the U.S. yesterday approved materials explaining Nortel Networks Corp.’s creditor-repayment plan, inaugurating the beginning of the end of one of the priciest bankruptcies on record, the Wall Street Journal reported today. Yesterday’s court hearings launched the formal process of polling creditors on the bankruptcy plans that will end Nortel’s corporate life after eight years in bankruptcy, and divide the $7.3 billion in proceeds from its global going-out-of-business sale. Creditors have to weigh in formally, and the Nortel distribution schemes need to pass another court test, but checks may finally go out next year to creditors, including employees put out of work in 2009 when the telecommunications icon was swept under in the global recession.

Telecommunications company Avaya Inc. is weighing a chapter 11 bankruptcy filing and nearing a deal to sell its call-center software unit in an effort to pare its heavy debt load after years of losses, the Wall Street Journal reported on Thursday. The company, which was taken private by buyout firms Silver Lake and TPG in 2007, could file for chapter 11 protection as soon as next month. The filing would likely come after it reaches a deal to sell the call-center software business. Clayton Dubilier & Rice LLC is among the potential buyers that participated in the most-recent round of bidding for the unit, which could fetch around $4 billion. Avaya could use the proceeds of the sale to repay some of its senior debt, while other creditors could swap debt for ownership in a reorganized company upon its emergence from bankruptcy. The company’s long-term debt stood at around $6 billion as of June 30, according to a regulatory filing.

Defunct telecommunications company Nortel Networks Inc. won a victory in its fight with federal pension regulators when a bankruptcy judge rejected a briefing schedule proposed by the Pension Benefit Guaranty Corp. (PBGC), Bloomberg BNA reported yesterday. Nortel, which filed for bankruptcy in 2009, had clashed with the PBGC over how to value the company’s unfunded pension liabilities. The PBGC claimed in 2009 that Nortel owed $593 million in pension payments, but the agency upped that amount to $708 million in 2014, a move that Nortel said lacked factual support. The judge’s decision yesterday setting an evidentiary hearing for Jan. 9-11, 2017, is a win for Nortel, which argued that the PBGC should be forced to turn over documents relevant to its valuation process. 

A plan to wind down the estate of former Silicon Valley startup Jumio Inc. won final approval from a bankruptcy judge, bringing the contentious chapter 11 case nearer to a close, the Wall Street Journal reported today. Following a hearing on Wednesday, Bankruptcy Judge Brendan Shannon said that he would sign off on the identity-verification company’s debt-payment plan, overruling opposition from its former chief executive as well as some shareholders. The ruling represents a victory for early Jumio backers, such as venture-capital firm Andreessen Horowitz and Facebook co-founder Eduardo Saverin, who fought allegations that they had worked to rig the bankruptcy to their advantage. At the center of the plan is a settlement reached earlier this year that was backed by Saverin and Andreessen, as well as a committee representing shareholders. When it takes effect, the plan will largely shield Saverin and Andreessen from future lawsuits tied to the bankruptcy, although some shareholders retain the right to sue Saverin and others. One shareholder lawsuit against Saverin is already pending.