This week marks the one-year anniversary of Nortel Networks’ bankruptcy declaration, so expect a myriad of “what went wrong” and “what’s gone” pieces to pop up in your inbox. As for what’s left of Nortel’s properties, this is it: the Nortel-LG joint venture and about 3,000 patents.
But what’s also left is a bunch of questions. A bunch. And they’ve gone unanswered for 12 months. Here are some examples, many of which we’ve been wondering alongside Mark Evans of All About Nortel:
The auctions: Why were most of Nortel’s assets sold at rock-bottom prices, especially considering the revenue most of them generated? And why did the bankruptcy courts accept Ciena’s equity bid over Nokia Siemens Networks’ all-cash offer?
Pensions: The Canadian government, of all governments, has done nothing to protect Nortel pensioners. Meanwhile, the United States government has seized control of pension assets for U.S. workers. Why the disconnect?
Severance packages: Employees in North America got nada. But some in France and Germany did, as Evans points out. Why?
IRS: Why was the United States Internal Revenue Service permitted to make a $3 billion claim against Nortel’s assets in Canada?
The “New Nortel”: One year ago, then-CEO Mike Zafirovski insisted a “new Nortel” would emerge from the Chapter 11 proceedings. But, six months later, the company started falling apart as the board authorized the first of many asset auctions. As Evans asks, and we echo, what changed?
Government oversight: The Canadian government was notorious for trying to distance itself from Nortel’s implosion. Pleas from pensioners have fallen on deaf ears; and, federal leaders voiced concerns about jobs staying in the Great White North, but little action came of those words. Here’s another thought: Did the feds bother to press Ericsson and Avaya, among other “happy buyers,” as Evans puts it, to keep jobs in Canada before approving the takeovers?
Board accountability: Why was the board seemingly never held accountable for the series of decisions that led to Nortel’s insolvency, the fire sales and for allowing Zafirovski to hang on so long?
Speaking of Zafirovski: First of all, was he the best Nortel could hire? Maybe so, given the company was coming off a huge accounting scandal and no one else wanted the job. Nonetheless, it was on his watch that Nortel fell off the cliff and so many insiders reported a negative cultural shift in a company that used to celebrate innovative thought and action. Now Zafirovski, who resigned in August 2009, has filed a $12 million compensation claim (we’ve referred to this action as truly tool-like behavior). And why? If anyone really believes he deserves the money more than the thousands of Nortel pensioners, well, we’ll just say it: that would be wrong. Way wrong.
Bonuses: This may have been the biggest blunder and insult of all, but apparently, it’s the Canadian (and American – hello, bailed-out banks!) way. Nortel forked out millions in bonuses last year, despite its insolvent status. And of course the money did not go to the everyday Nortelian doing what he or she could to keep the company alive. No, the money went to the bigwigs who allowed the Nortel to fail. Why oh why is incompetence rewarded?
