Nortel Networks Corp. files for bankruptcy

Sid John January 15, 2009

Nortel Networks Corp, a renowned telecommunications equipment maker company, filed for bankruptcy protection in Canada and the US on this Wednesday, becoming the first major technology company to take that step in this recessional phase.

The company had been facing a sharp drop in orders from phone companies, Nortel filed for court protection a day before it was due to make a debt payment of $107 million. Nortel has been attempting to recover for years from an accounting crisis that sparked shareholder lawsuits, regulatory investigations and the firing of key executives, including CEO Frank Dunn.

Canadian Industry Minister Tony Clement said the government is willing to help Nortel restructure as a viable company. "The government of Canada appreciates the importance of the telecommunications industry to our economy," Clement said in a statement. Clement said the government has already agreed to provide up to $24 million in short-term financing and is open to discussing other loans.

Reference taken from www.profit.ndtv.com