RIM attempts to stop the sale of Nortel
by The PocketBerry Team
Some people take no for an answer and walk off the court know they lost. In this case, RIM won’t let its loss go, as they are still hanging on to Nortel for cancelling their bid and inheriting it over to Ericsson. Lazaridis was found testifying before an emergency sitting of the industry committee reviewing the sale of Nortel’s patents and technology. “In my view, the Nortel transaction, as currently structured, is not in Canada’s interests,” said Lazaridis well after their bid was denied.
For those unaware, Nortel filed for bankruptcy protection in the U.S. and Canada in January after the company failed to secure $1 billion from the feds to survive long enough to bring its fourth generation LTE wireless technology to market. About a month ago, a joint court decision in both Ontario and the U.S. state of Delaware approved the sale of Nortel’s technology to Ericsson, the Swedish telecom giant that bid $1.13 billion for the assets.
RIM’s co-CEO insists that selling the assets to an offshore company would be as damaging to Canada as “allowing the AVRO Arrow project to fail 50 years ago”. He is requesting the federal government to use the Investment Canada Act, which basically calls for a review of foreign takeovers valued at more than $312 million, to then see if the deal is in Canada’s interests or threatens the security of the country itself.
And of course on Nortel’s side, they obviously are suggesting that the value of the company is far less than $312 milluon. Nortel executive George Riedel assured MPs Friday his company has not used tax credits in the last 10 years to subsidize its research and development. He said the book value of Nortel about $150 million, which should exempt it from a government review under the Investment Canada Act.
Riedel also said that Canada would not lose control of fourth-generation wireless technology because Nortel would retain the patents for LTE and license them out to Ericsson or anyone else that wants to use them.
Meanwhile a group of retired Nortel employees were in Ottawa to demand the federal government change the law to make the company’s pension funds first to benefit from the sale of any Nortel’s assets.
“What we are asking for is preferred creditor status which would bump us up above the bond holders,” said Tony Marsh the group’s spokesman.
-by Mac Jadalhack
Source: Toronto Sun
