Ontario Superior Court of Justice extends stay to May 1 2009
Nortel Networks Corporation has announced that it, Nortel Networks Limited and the other Canadian subsidiaries that filed for creditor protection under the Companies’ Creditor Arrangement Act, or CCAA, have obtained an order from the Ontario Superior Court of Justice extending, until to May 1, 2009 of the stay of proceedings that was previously granted by the Canadian court.
An initial 30-day stay of proceedings was obtained on January 14, 2009. The purpose of the stay of proceedings is to provide Nortel with an opportunity to develop a business and financial restructuring plan for consideration by its creditors and the Canadian Court.
Nortel has entered into an amendment to its agreement with Export Development Canada (EDC), initially announced on January 14, 2009, to permit continued access by Nortel Networks Limited (NNL) to its EDC performance-related support facility up to May 1, 2009 for up to a maximum of $30m of support. The extension of the support facility has been approved by the Canadian court.
Nortel and NNL also obtained an order from the Canadian court permitting the postponement of their respective annual general meetings of shareholders beyond the statutory deadline of June 30, 2009 to a date that is within six months following the termination of the stay period under the CCAA proceedings. The postponement will allow Nortel’s senior management to fully focus on the preparation of its restructuring plan and avoid the costs associated with annual shareholders’ meetings during this period.