LEXPERT MAGAZINE
|
JANUARY/FEBRUARY 2018 35
| TOP 10 DEALS |
of Independent Trustees of OneREIT:
Torys LLP
8
The Nortel
Global Settlement
is Top Deal was formerly one of our Top
Business Decisions. "I've been involved in
the Nortel case since the fall of 2008," says
Jay Carfagnini, of Goodmans LLP, which
represented the Monitor, Ernst & Young.
While Nortel may not have taken quite as
long as Jarndyce v. Jarndyce from Dickens'
Bleak House, it drew in many law firms,
courts, meetings, and multiple jurisdictions
— and has taken a very long time indeed.
Torys LLP, which acted for Nortel, with
a team led by Tony DeMarinis and Scott
Bomhof, wrote to Lexpert, "Nortel's multi-
jurisdictional business, unprecedented le-
gal issues, and eventual big cash stockpile
made the restructuring both exceptionally
challenging and fascinating, and a case the
likes of which may not be seen again for
some time."
Sticking with our consolidation theme,
this time globally, the Nortel case/deal was
re-fuelled by an infusion in 2011 that took
most observers by surprise. As reported
at the time in e Guardian, "e Apple,
Microso, Sony and BlackBerry maker
Research in Motion are part of a winning
consortium of six companies which have
bought a valuable tranche of patents from
the bankrupt Nortel Networks patent
portfolio for $4.5bn (£2.8bn), in a hotly
contested auction that saw Google and In-
tel lose out." ere was something to settle
with, in other words.
According to Carfagnini, "e Global
Settlement was arguably the most signifi-
cant milestone in the case. Given the num-
ber of jurisdictions involved and the various
creditor and stakeholder interests, a global
resolution was the only way the estates were
going to be in a position to distribute mon-
ey to creditors and pensioners in the various
jurisdictions around the world. As you can
imagine, the settlement itself was very com-
plex, as it had to effectively shut the door on
the myriad of issues that had arisen in the
context of a multinational business and of
its wind-down. In this regard, I would add
that the work of retired Delaware Judge
Joseph Farnan in mediating and facilitat-
ing the settlement at that critical time in the
case was also important."
D.J. Miller, a partner at ornton Grout
Finnigan LLP offers this explanation for
why the decision made the deal: "e
Global Settlement in Nortel announced
on October 12, 2016, became somewhat
inevitable aer the Ontario Court of Ap-
peal (OCA) issued 42-page written Rea-
sons on May 3, 2016, dismissing an appli-
cation by the bondholders and US debtor
estate for leave to appeal the pro rata alloca-
tion decisions issued by the Canadian and
US Courts. e very strong OCA decision
led to the first level appeal court in Dela-
ware, which had already heard the appeal
but hadn't issued a decision, referring the
matter directly to the highest appeal court
in Delaware for determination. Had a US
Appeal Court reached a different conclu-
sion than the OCA, it would have le the
parties in limbo with no means to allocate
the $7.3 billion in global proceeds and fur-
ther costs being incurred, since any alloca-
tion required a consistent decision of the
Canadian and US Courts. is would have
been an 'Armageddon' scenario for credi-
tors, who had already waited seven years
with no distribution.
"e highest appeal court in Delaware
had previously issued a harsh criticism over
the costs incurred in the Nortel proceeding
and the resulting impact on pensioners and
other creditors. It therefore seemed unlikely
that the same Court would overturn the un-
derlying decision and go in a different direc-
tion than the OCA (which had already up-
held the underling decision), as that would
have sent the parties back to square one. At
its simplest, once everyone came to that re-
alization, it was just a matter of how much
money would have to be transferred to
bring it to an end. e contributors to, and
beneficiaries of, the transfer of money fol-
lowing the allocation decisions were known
from the outset, and never changed."
Key Law Firms
Nortel Canada: Gowling WLG
(Canada) LLP
Nortel Networks Inc.: Norton Rose Ful-
bright Canada LLP (Corporate/M&A,
Restructuring, IP, Litigation); Torys LLP
(Restructuring, Litigation)
Informal Nortel Noteholder Group:
Bennett Jones LLP
US Official Committee of Unsecured
Creditors: Cassels Brock & Blackwell LLP
(Restructuring )
UK Pension Protection Fund and Nortel
Networks UK Pension Trust Ltd.: ornton
Grout Finnigan LLP (Restructuring, Liti-
gation); Blake, Cassels & Graydon LLP
(Restructuring, Litigation)
Wilmington Trust, National Association:
Dentons Canada LLP (Canadian
Counsel)
Monitor, Ernst & Young: Goodmans LLP
Joint Administrators of Nortel Networks UK
Ltd.: Davies Ward Phillips & Vineberg
LLP; Lax O'Sullivan Lisus Gottlieb LLP
Former Directors and Officers of Nortel
Canada: Osler, Hoskin & Harcourt LLP
Former employees and LTD beneficiaries of
Nortel Canada: Koskie Minsky LLP
Ontario Superintendent of Financial
Services: Paliare Roland Rosenberg
Rothstein LLP
Morneau Shepell Ltd.: McCarthy
Tétrault LLP
Nortel's continuing Canadian employees:
Nelligan O'Brien Payne LLP; Shibley
Righton LLP
9
Stelco
Restructuring
Another perennial favourite on Lexpert
lists is the restructuring of Stelco Inc.. It
had been operating under the protection
of the Companies' Creditors Arrangement
Act (CCAA) since being granted an initial
stay of proceedings in September of 2014.
On June 9, 2017, the court approved its re-
structuring under the CCAA. On June 30,
Bedrock Industries Group LLC announced
that all of the closing conditions regarding
its announced transaction had been satis-
fied and its acquisition of Stelco was closed.
Bedrock plans to continue steel opera-
tions, and approximately 2,200 existing jobs
would continue at Stelco's Hamilton and
Lake Erie facilities. e Restructuring plan
also has the necessary support from Stelco
creditors, including the province, and Stel-
