|  | | 2007 News and Press Releases | | |
SETTLEMENT NEWS:
Ontario Judge Approves $2.5 Billion Settlement of Nortel Shareholder Class Actions
Staff Writer
Canada Newswire English. January 22, 2007
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EXCERPT: Mr. Justice Warren K. Winkler of the Ontario Superior Court of Justice approved an estimated $2.5 billion (USD) settlement last Thursday that resolves seven lawsuits in the United States, Ontario, Quebec and British Columbia as to whether Nortel Networks Corp. ("Nortel") misled investors during two separate class periods. The decision follows the approval of the settlement in the two U.S. class actions on December 26, 2006 by U.S. District Court Judges Richard Berman and Loretta Preska, and moves the settlement one step closer to final approval. On Friday, Justice Groberman of the Supreme Court of British Columbia also approved the settlement on behalf of British Columbia shareholders for the Nortel I class action. The settlement still requires approval by the Quebec Superior Court. Under the settlement, Nortel has agreed to pay $575 million in cash and issue common shares representing 14.5% of its current equity, worth approximately $1.7 billion based on Nortel's current share value. The settlement also includes $228.5 million in payments from Nortel's insurers. Nortel further agreed to contribute one half of any recovery in existing litigation by Nortel against former senior officers who were terminated for cause in April 2004 and to implement certain corporate governance enhancements and to consider others. In approving the settlement, Justice Winkler concluded that the settlement was "fair, reasonable and in the best interests of the class (of Nortel investors)" and provides "the maximum available amount for satisfaction of the claims in total, short of trial". |
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