Nortel files Chapter 11

As a result of the global financial crisis, Nortel Networks and Nortel Networks Capital Corporation have filed voluntary petitions in the US under Chapter 11 of the US Bankruptcy Code.

The companies are subsidiaries of the Nortel Networks Corporation, which together with Nortel Networks Limited and certain of its other Canadian subsidiaries, are seeking creditor protection under the Companies' Creditors Arrangement Act in Canada.

The company said that the process will allow it to deal with its cost and debt burden, to effectively restructure its operations and to narrow its strategic focus in an effective and timely manner.

The company's affiliates in Asia, including LG Nortel, and in the Caribbean and Latin America, as well as its Nortel Government Solutions business, are not included in the proceedings.

But certain of its European, Middle Eastern and African subsidiaries are expected to make consequential filings in Europe.