One of the ways to raise cash in a bankruptcy is to sell underperforming business units. Given the economy and credit availability, plus the very competitive industry they're in, any buyer would only make a very low-dollar offer for a business unit. (This is also AIG's problem.) Don't be surprised if they file for Chapter 7 (liquidation) in 12 months.
Nortel Networks Corp. is facing a class action lawsuit stemming from changes the company made to its pension plan in 2006.
The suit was filed with Ontario Superior Court on Tuesday on behalf of Nortel employees from across Canada. It seeks damages due to what the plaintiffs consider Nortel's "failure to provide to their employees reasonable notice of the changes to the pension plan."
The employees also claim the telecommunications equipment maker doesn't plan to take into account future salary increases beyond Jan. 1 when calculating the value of the pension benefits.
The exact number of employees involved in the lawsuit and the procedure for handling claims by individual employees will be determined in the certification process.