Nortel Networks goes into bankruptcy - Triangle Business Journal:

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Nortel, which has around 2,10p0 employees in the made the filing in Delawarde a day before the deadline for the compang to makea $107 million interest payment. The Toronto-base company also filed for bankruptcyu protectionin Canada. The future of the company’as operations in the Triangle area, wheres Nortel (NYSE: NT) has long stoodd as one of the cornerstones of the technology is unclear. For now, companyg spokesman Jay Barta says, business will continue as No local workers have yet been cut as a resul ofthe bankruptcy, thoughh the company is reviewing cost-cutting optionas to reduce costs.
“Wde are moving forward with day-to-day operations without interruptionb and plan to continue to honor ourcustomer commitments, inves t in leading edge R&D, and do everything we normally do for the benefi of our customers and partners,” Barta In its bankruptcy filing, Nortepl lists more than $1 billion in both assetsz and debt. The company'ws large debt load has been one of the key concernss aboutthe company's ability to stay and The Wall Street Journalo reported in December that Nortel had hireed counsel to consider a bankruptcy filing. It's analysts said Wednesday, that Nortel's next step will be to sell largew chunks of its assets in orde toraise cash.
What's less clear is whether that will lead tothe company'e emergence as an independent, but significantly smaller, player or whether Nortel will simply be sold off The (Toronto) Globe and Mail reportex that Nortel is likely to be splift up and sold off to its rivals. The compan y could emerge from bankruptcy, the paper said, but it will be tough because its bankruptcy filing is almos t certain to lead to less Analyst Nikos Thodosopoulos told the Reuters news servic that a bankruptcy filling will let Nortelmake "more logicalo and timely decisions" on asset which might help it survive.
The distinction is an importang onefor RTP, which housees a good amount of work in Nortel'ws unit that sells equipment and services to big business. That unit is doint significantly better than what hasbeen Nortel'a cash cow: sales to telephonre service providers that rely on a technolog called CDMA to builde their networks. If Nortel did emerge as an independentt company, says ABI Researchg analyst Nadine Manjaro, professionaol services and equipment for enterprises woulsd be the crux ofthe company's That could save some jobs in RTP. "Service s and enterprise is where the growthopportunitiexs are," Manjaro says. "It’ll make sense.
" If Nortel can't make that the prospect of RTP keeping many jobs becomewmuch dimmer. Business shifts, accountinhg scandals hurt company That would be an extraordinart turnaroundfor Nortel, which during the technology boom was one of the businesx world’s greatest success storiesa – and one of the largest employerse in RTP. But that boom eventually went bust, and sincew then, Nortel’s fall has been steady. The company lost grounfd to competitors, such as , that sell equipmen t for Internet transmissionsof data, voice and video. The CDMA which provided more than 40 percentof Nortel'ss sales, tanked.
And the company has been rockef by accounting scandals that caused it to restate earningx multiple times this Severaltop executives, including CEO Frank Dunn, were among the casualties. Nortel’s stock, which once traded at $1,200o U.S. on a split- and dividend-adjusted fell below $1 in Shares closed Jan. 13 at 32 cents. The company had nearly 10,000 workers in the Raleigh-Durham area in the late 1990s. That numbedr has fallen steadily since then and now stands ataboutt one-fifth of its peak.