Nortel Bankrupt But Not Dead
We received an e-mail from Alejandro at Nortel last week:
"Nortel is not bankrupt, but we had to go through several internal sessions yesterday to understand Chapter 11. The goal is to protect you from creditors to restructure debt and the company structure.
"I understand your article. Most of the media captured bankruptcy. Only a few added bankruptcy 'protection' to the headline. We clarified this to several partners and customers and received their support to do business as usual."
Alejandro, that's a very good point. Nortel filed for Chapter 11, which means, as far as we can tell, that the company will likely continue to operate with some protection from creditors. "Bankrupt" is a very harsh word, and while it might technically kind of sort of describe a company that files for Chapter 11, it's really more appropriate for a firm that has suffered Chapter 7, Chapter 11's meaner cousin. Chapter 7 is liquidation bankruptcy, the Circuit City kind. And that's not where Nortel is, just to be clear. Nortel lives.
Posted by Lee Pender on January 20, 2009