Nortel walks from clean-up cost of about $18 million

It is no surprise that Nortel is insolvent and seeking to restructure under the Companies’ Creditors Arrangement Act (“CCAA”). What is a surprise is the ruling this month of the Ontario Superior Court of Justice that the Ministry of Environment (“MOE”) Orders which require Nortel to perform environmental clean-up work do not take priority ahead of other obligations. Since complying with the Orders would require Nortel to expend funds the environmental liabilities are found to amount to a financial obligation and are stayed by the CCAA proceedings and therefore would be more properly addressed as a claim in the process.

Read the full summary and link to the case in our March newsletter by clicking here.

If you have any questions about this article, I invite you to contact me at shari@elliottlawyers.com.

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