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An Ontario Court yesterday dismissed fraud charges against three former top executives at bankrupt Nortel Networks Corp. after a year-long trial involving one of the most spectacular casualties of the 1990's dot-com bubble, Reuters reported yesterday. Former Chief Executive Frank Dunn, former Chief Financial Officer Douglas Beatty and former Controller Michael Gollogly were found not guilty of fraudulently misrepresenting Nortel results in a tumultuous time for the one-time tech superstar between 2000 and 2004. Prosecutors had charged that the accused manufactured a loss in one quarter at the end of 2002 and a profit in a subsequent three-month period, defrauding investors and triggering more than $12 million in cash and stock bonuses. But Ontario Superior Court Justice Frank Marrocco said that he was not satisfied that the three accused had improperly accounted for accrued liability balances to misrepresent the 2002 results, nor that they had fudged income statements in the first quarter of 2003 in order to earn a bonus.

Bondholders, suppliers, governments and former employees from around the globe hold $20 billion in claims based on different insolvency laws and are competing for Nortel's last remaining asset - $9 billion in cash, Reuters reported on Friday. Ontario Chief Justice Warren Winkler, who has spent the past few months analyzing proposals, begins a week of talks today intended to find common ground. Winkler has called the case "one of the most complex transnational legal proceedings in history." Failure of the mediation would mean years of litigation, with the possibility that parallel legal fights in different countries could reach inconsistent outcomes, according to Winkler, who was appointed to mediate by the U.S. and Canadian courts. John Penn, a bankruptcy attorney who is not involved in the case, said that the mediation is comparable to a football playoff between the New England Patriots, the Hamilton (Ontario) Tiger-Cats, Manchester United and Australia's Sydney Swans. "Each calls it 'football' but they all do something that's quite different," said Penn, of Haynes and Boone in Fort Worth, Texas. The complex disputes stem from Nortel's former might as a global telecom empire with a web of intercompany finances and a workforce that once stood at 93,000.

A group of LightSquared Inc.'s lenders reiterated its desire to go after Phil Falcone and Harbinger Capital Partners for a pre-bankruptcy loan made to the wireless satellite company, making it clear that the troubled venture's officers and directors will not be a target of the lawsuit, Dow Jones Daily Bankruptcy Review reported yesterday. In a bankruptcy court filing on Friday, the lenders said that while they still want a court to let them challenge a July 2011 loan Harbinger made to LightSquared, they do not "at this time" seek any action against LightSquared itself. In a Dec. 12 filing, LightSquared said that it was concerned that its officers and directors would be targets of the suit.

THQ Inc., the maker of “Saints Row” and “Company of Heroes” video-game franchises, won court approval of a revised, longer bankruptcy sale process and loan to help fund operations after reaching an agreement with creditors, Bloomberg News reported yesterday. Bankruptcy Judge Mary F. Walrath at a hearing yesterday approved guidelines that will govern the sale of the company's assets at a bankruptcy auction and the company's $37.5 million bankruptcy loan. The court "approved a process for a sale by Jan. 23" that keeps Clearlake Capital Group LP as the lead or so-called stalking-horse bidder, said Jeffrey C. Krause, a THQ attorney. Potential buyers will have to submit bids by Jan. 22, and the company will hold an auction later that day to determine the best offer for the assets. THQ will seek court approval of the sale at a hearing scheduled for the next day, with closing expected on Jan. 24.

A Walt Disney Co. unit asked a federal judge to block a bankruptcy court ruling that would allow another company to sell patents related to three- dimensional movies, Bloomberg News reported yesterday. Walt Disney Studios Motion Picture Production's rights to use the technology to convert traditional films into 3-D movies will be harmed, the company said in its appeal yesterday in U.S. District Court in Wilmington, Delaware. The dispute involves the shell company left in bankruptcy by the collapse of Digital Domain Media Group Inc., the provider of special effects for the movies “Transformers” and “Titanic.” That shell, known as DDMG Estate, held an auction for the patents last month that was won by RealD Inc. Disney claims it has the right to use the technology because of agreements it signed with the original patent holder in 2008 and 2009.

U.S. Trustee Roberta DeAngelis is objecting to the short timeline videogame company THQ Inc. is proposing for the sale of its assets, Dow Jones Newswires reported yesterday. In rules filed with the bankruptcy court, THQ proposed selling its assets during a Jan. 9 auction with bids due by Jan. 8. THQ filed for chapter 11 protection with an offer from Clearlake Capital Group LP worth roughly $60 million in cash, loan forgiveness and assumed liabilities. It named the offer from Clearlake as the lead bid. DeAngelis in an objection filed yesterday said that "the time table set forth in the Motion denies parties in interest an opportunity to effectively participate in the proposed sale process."

Nortel Networks a motion for approval of a settlement agreement with its official committee of retired employees, BankruptcyData.com reported today. Under the terms of the settlement, the Nortel would terminate the retiree welfare plans as of May 31, and pay the retiree committee $67 million in settlement of all claims related to the retiree welfare plans. The agreement further provides that holders of retiree claims would release Nortel from further liability. A bankruptcy court hearing is scheduled for January 23 on the matter.

THQ's financial fall continues as the company has been dropped from the NASDAQ stock exchange following a dip in value resulting from the firm's recent chapter 11 filing, DigitalTrends.com reported today. NASDAQ rules require that a listed company’s stock maintain a value of at least $1 per share. On December 19, the day THQ announced that it was filing for chapter 11 protection, the company’s stock dipped to $0.36 per share. It currently trades at $0.22 per share. For the moment, THQ will continue to be traded on other stock markets, specifically over-the-counter markets that operate via telephone and Internet, instead of a trading floor. Once the company’s bankruptcy proceedings conclude however, THQ will become a privately-owned company with no stock to speak of. The firm’s stated goal is to slowly work its way back up, and being a privately-owned video game publisher would allow it to take more risks and be a more agile company.

LodgeNet Interactive Corp. said that it will file a pre-packaged chapter 11 under an agreement with affiliates of Colony Capital LLC, which will invest $60 million in the provider of on-demand movies to hotel rooms, Bloomberg News reported on Monday. LodgeNet has not posted an annual profit since 2006. Last year, 95 percent of its revenue came from the hotel industry, with Hilton Worldwide and Marriott International Inc. accounting for about a third of sales, according to the company's filings. LodgeNet said that it expects unsecured creditors will be paid in full at the end of the Chapter 11 process. A steering committee of lenders holding the company’s debt will support a five-year extension of its $346 million secured credit facility.

A group of creditors owed more than $111.7 million is trying to force TPG Troy LLC, which is owned by liquidating telecommunications company Hellas Telecommunications II SCA, into chapter 7 bankruptcy, Dow Jones DBR Small Cap reported today. SPQR Capital (Cayman) Ltd., Lansdowne Capital SA and Crest One SpA, which are owed $76.6 million, $26.1 million and $9.1 million, respectively, asked a bankruptcy court last week to put Delaware-based TPG Troy into chapter 7