Hogan Lovells Wins Settlement for Trustee of UK Nortel Pension Scheme

LONDON, 15 May 2017 - The Trustee of the UK Nortel Pension Scheme, represented by global law firm Hogan Lovells, has announced that a settlement of the long-running dispute over Nortel's residual assets has finally been achieved and is ready to implement.

Hogan Lovells has advised the Trustee of the Nortel Networks UK Pension Plan since 2010 on all aspects of its recovery efforts in the worldwide Nortel litigation, acting as coordinating and strategy counsel, and representing it in the various UK proceedings.

Nortel Networks collapsed into insolvency in January 2009, with its European, U.S. and Canadian entities making simultaneous insolvency filings in London, Delaware and Toronto. Nortel's group company based in the UK, Nortel Networks UK Limited (NNUK), was the sponsoring employer of a large defined benefit pension scheme with over 40,000 members. At the date of the Nortel collapse, that scheme had a buy-out deficit of approximately £2.1bn, making the pension scheme trustee (and alongside it, the UK Pension Protection Fund) one of the largest creditors in the worldwide insolvency.

Last week at court hearings in Toronto and Delaware, Justice Newbould (Canada) and Judge Gross (U.S.), made orders permitting the core parties to implement a settlement (reached in principle last October) and at last distribute approximately US$7 billion of Nortel's residual assets to its creditors all over the world.

Underlying the present settlement was the Trustee's victory in the ground-breaking legal judgments issued in May 2015 by the Delaware and Toronto Courts that creditors everywhere should share the US$7 billion residual assets in the Lockbox, pro rata according to their creditor claims, on an equal footing.

The settlement, which had been subject to Court approval but is now final, is expected to deliver in excess of £1bn to the Trustee.

Angela Dimsdale Gill, head of pensions litigation at Hogan Lovells, said:

"This result is the product of a lot of hard work over many years by an intensely committed team of clients and advisors. We are proud to have played a central role in delivering this recovery to the Nortel pensioners."

The Hogan Lovells team was led by Angela Dimsdale Gill, head of pensions litigation, and included partners Matthew Bullen, Crispin Rapinet, and John Tillman, alongside members of Wilberforce Chambers, with Willkie Farr & Gallagher in the US, and Thornton Grout Finnigan and Blake, Cassels & Graydon LLP in Canada. PwC were financial advisers.

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