Nortel files for bankruptcy

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pinkslips_small.jpgADOTAS — In what may be the beginning salvo for companies in trouble, Nortel Networks Corp, once the largest Canadian company, filed for bankruptcy today.

The telecom-hardware manufacturer’s failure to sell one of its division and a looming debt payment of $107 pushed it over the edge. Nortel’s shares were worth about $192-million on Tuesday and were down 77 percent this morning after the news broke. The company has about 26,000 employees after years of layoffs.

“Based on this filing, the board of directors must believe that not only is the fourth quarter bad, but that the first quarter is going to be just as bad or worse,” Duncan Stewart, an analyst at DSAM Consulting in Toronto, told Reuters. “Although they have cash in the short term, even the medium-term outlook is not enough to make the company viable as a going concern.”

The company tried to turn things around after a major accounting and management mess, but its plan forward, wireless equipment, ethernet buildouts, office phones, seemed to lack focus. Now, it will most probably be broken down and sold piecemeal. Any shareholders who oddly stayed will get cleaned out and employees will be booted.

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1 COMMENT

  1. Well, Well…..I worked as an installation tech for this bunch of clowns from 1987 to 1992 when I was harassed off of the job and subsequently fired. As an ex-ATT employee, I could see that their “management style” was taking them no-where and that is where they are now. When a company has “if-you-don’t-like-it-here….quit” as its motto, what else could you expect. I sold them short years later and made money on it. Too bad I didn’t hold that position longer……

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