Employees Challenge Nortel's $38M Deferred-Pay Grab

Law360, New York (February 9, 2011, 7:42 PM EST) -- A group of Nortel Networks Inc.’s former employees is challenging the bankrupt telecom’s bid to distribute $38 million to unsecured creditors that was held in trust from an employee deferred-compensation plan.

The employees contended the plan was subject to protections under the Employee Retirement Income Security Act that would prevent Nortel’s estate from accessing the funds, an attorney for the group said at a hearing Wednesday in the U.S. Bankruptcy Court for the District of Delaware.

The attorney, Robert J. Keach of Bernstein Shur Sawyer &...
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