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Nortel Networks Corp.'s bondholders and the company's U.S. division lost a bid to upset a ruling on how $7.3 billion should be divided among competing national units of the defunct telecommunications giant, Dow Jones Daily Bankruptcy Review reported today. Court orders issued yesterday leave standing the critical elements of a May decision that disappointed bondholders owed $4 billion by Nortel, who were counting on Nortel U.S. to win an international tug of war over the money. The cash-split decision said that a "modified pro rata” formula would be used to divide the money, so that the Nortel units left with the biggest debts will get the largest share of the money. Read more.

Securities regulators have launched a broad investigation into whether hedge funds and other investors are improperly selling hot private technology stocks amid a boom in the trading of such shares, the Wall Street Journal reported today. The investigation, by the Securities and Exchange Commission, is focused on a burst of new activity recently by people selling pre-IPO shares as valuations of private tech companies have exploded and companies have opted to remain private for longer. The SEC also is examining a recent increase in firms selling employee-owned shares of private companies through derivative transactions. In some cases, the sale of employee shares through such derivative transactions is prohibited by the companies. The SEC is looking into whether such derivative transactions represent possible violations of the Dodd-Frank Act of 2010, which makes it unlawful for most individual investors to trade swaps unless the transaction takes place on a national securities exchange with a registration statement from the SEC.

The company behind the Local.com website — a place for Internet users to search for local businesses — filed for bankruptcy on Tuesday, saying it stumbled after a sudden drop in traffic last year, the Wall Street Journal reported today. Company officials who put Local.com Corp. into chapter 11 protection plan to sell the 48-worker company, which has patents for the way it generates search results for consumers who are looking for businesses, products and services by geographic area. The Irvine, Calif.-based company said that Local.com draws about 14 million monthly visitors, and took in $83 million in revenue last year from advertising such as pay-per-click, pay-per-call and banner ads. But it struggled after a drop in visitors in the first quarter of last year, which meant that it collected less than the $1.6 million it expected to receive from Google Inc. and Yahoo Inc. for generating traffic for the search engines. Company officials weren’t specific about the severity of the drop.

Nextel's bankrupt Latin American arm gained U.S. court approval on Thursday of a plan to exit Chapter 11 bankruptcy under the control of bondholders including Aurelius Capital Management, the company's lawyer said, Reuters reported yesterday. NII Holdings, a telecom operator for the Nextel brand in Brazil, got approval for the contested $4.35 billion turnaround plan from Bankruptcy Judge Shelley Chapman, concluding a trial that began earlier this month, NII attorney Scott Greenberg said yesterday. The plan, which will cede control to Aurelius and other holders of $4.35 billion in bonds, is based on a series of settlements of complex legal disputes over the validity of inter-company transfers. While most creditors supported the deal, a bondholder subset known as the CapCo group called it a sweetheart deal for Aurelius that reduced CapCo's payout by $150 million — more than a third of its total recovery.

Aereo Inc., the company behind a now-defunct TV-streaming service, won final court approval yesterday of a liquidation plan that will divvy up the proceeds from the sale of the company’s assets, the Wall Street Journal reported today. Bankruptcy Judge Sean Lane said that he would sign off on the plan following a brief hearing yesterday. Unsecured creditors, slated to receive about 10 percent of what they are owed, voted unanimously to support the proposal. Aereo effectively shut down a year ago following a landmark U.S. Supreme Court loss last June and sought chapter 11 protection in November. Under the liquidation plan, proceeds from the sale of the company’s assets are earmarked to pay a $950,000 settlement the company reached with broadcasters to put an end to litigation over the legality of Aereo’s business model.

The chief executive officer of Nextel's bankrupt Latin American arm denied giving bondholders a sweetheart deal as he testified yesterday on the company's $4.35 billion restructuring plan, Reuters reported yesterday. NII Holdings Inc, which operates the Nextel brand in Brazil, is trying to emerge from chapter 11 protection under a plan to hand control to Aurelius Capital Management and other holders of $4.35 billion in bonds. The plan is scheduled for four days of trial in bankruptcy court, where one creditor faction alleges NII was a doormat for creditors who designed the plan themselves. Steven Shindler, NII's chief executive officer, testified yesterday that he rejected multiple restructuring proposals he deemed unfair, and initiated a meeting at NII's Reston, Va.-based headquarters with Aurelius boss Mark Brodsky. "I wouldn't call it friendly, but it was a healthy dialogue," Shindler said.

LightSquared Inc. won a judge’s approval for $1.75 billion in exit financing as it gets set to conclude a contentious three-year trip through bankruptcy, Bloomberg News reported yesterday. The wireless broadband venture, which has been locked in a battle with Dish Network Corp. Chairman Charles Ergen, also got permission to keep secret key data on fees to investment bankers and lenders led by Credit Suisse Group AG, Jefferies Group LLC and Morgan Stanley. Bankruptcy Judge Shelley Chapman approved the bankruptcy plan in a March 26 ruling that resolved most disputes between LightSquared and Ergen, and she approved the exit financing yesterday.

Advanced battery maker A123 Systems Inc., bought out of bankruptcy in 2013 by a Chinese auto-parts maker, is investing $300 million to double its global battery-making capacity, adding to plants in Michigan and China to meet surging demand, the Wall Street Journal reported today. The turnaround reflects the company’s change in strategy to focus on 12-volt lithium-ion batteries for starting cars as well as larger 48-volt batteries that can inexpensively turn cars into hybrid, gasoline-electric cars. These batteries serve as substitutes for traditional lead-acid batteries found in the hundreds of millions of cars on the road today. Work is to begin on expanding the three plants this year. A123 has one factory in Michigan and two in China. Demand for the batteries is primarily in Europe and China, where the demands to improve fuel economy and reduce exhaust pollution are higher than in North America.