Submitted by Marc Chiang01.09.2009
According to the Wall Street Journal, Nortel has hired attorneys to explore bankruptcy court protection if the restructuring plan doesn't work as hoped.
The Canadian firm said "no bankruptcy filing is imminent" and pointed to a Standard & Poor's Ratings Services report Nov. 21 that stated Nortel could sustain adequate levels of liquidity for the next 12 to 18 months. "We remain focused on carrying out the restructuring we outlined on Nov. 10 to cut costs," said a Nortel spokesman.
However, in its third-quarter report last month, Nortel reported a whopping net loss of $3.4 billion compared with a $27 million net income gain in the previous year's third quarter. Nortel also cited a "challenging economic environment, competitive pressures, and reduced spending by carrier customers" that have been weighing down the company.
Although Nortel is headquartered in Canada, this prediction will be deemed to be true if Nortel's US operations file for bankruptcy, i.e. chapter 11 protection, on or before July 31, 2009.
Suggested Odds50.00%
Prediction Close Date:07.30.2009 (EST)
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This occurred a lot sooner than expected. Perhaps redraft to predict if Nortel will completely go out of business in '09? Or perhaps it is acquired somehow.
"As much as you want to blame the economy for Nortel’s woes, the reality is that Nortel was going to continue to sputter even if the recession didn’t materialize." Seeking Alpha
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