This Ottawa Citizen article talks about a private equity firm wanting to bid on an intact Nortel--as opposed to the piecemeal breakup that supposedly began with the agreement to sell Nortel's wireless carrier units to Nokia Siemens Networks for $650 million.
Somewhat buried in the article is the fact that the bankruptcy judge turned down the request by the private equity firm, MatlinPatterson, for an extension to the time limit for would-be bidders seeking to outbid NSN. The judge explained that NSN is a "bird in the hand," which, in his estimation, is preferable to going back to square one without NSN's bid for just a piece of Nortel.
Although this particular effort by MatlinPatterson appears to have failed to stop or delay the auction of the wireless units--and thus the breakup of Nortel--the gambit highlights how uncertain the environment is for Nortel Enterprise customers. The judge's comments seem to indicate that he's committed to going forward with a piecemeal sale, but before this came up, no one even questioned that the chance for keeping Nortel together had passed.
What if the judge had decided that it was in the creditors' best interest to go back and auction Nortel as a whole? As it is, Nortel went through two court-approved extensions in its bid to buy time to make a run at restructuring the company as a whole. That time has been lost, and with it, customers and potential customers, perpetuating Nortel's downward spiral, a spiral that drives Nortel's value down ever further, thereby attenuating the business-unit selloff process, as potential buyers wait for the price to fall some more.
The bottom line is that bankruptcy is a minefield, and Nortel isn't anywhere near getting out of this minefield. The company may have avoided the mine called "MatlinPatterson petition," but who knows what other creditors may have on their minds or up their sleeves?
In short, there's no overarching plan for getting to the end of this process, at least no plan that's been approved by the court--and any plan anyone has that hasn't been approved by the court isn't really a plan--it's a daydream. The current daydream that Nortel leadership is chasing is one where they sell off the business units for the most they can get. But Nortel leadership doesn't control this process--they're just one of many stakeholders.
It's hard to deal with a vendor when that company's direction isn't being set by the people who nominally run the company. Mike Z can still tell you who's allowed to park in his parking space, but if you're a customer, it's not clear how much else he can tell you with any confidence.
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