A 2011 Judicial Scolding Had No Discernible Effect on Mediation Efforts (Nortel Networks Bankruptcy, Part Five)

Chess Pieces — A Judicial Metaphor

By: Donald L Swanson

Back in 2011, the Third Circuit Court of Appeals wrote a scathing opinion about the behavior of the disputing parties in the Nortel Networks bankruptcy case.

The Third Circuit’s opinion is published at In re Nortel Networks, Inc., 669 F.3d 128 (3rd Cir. 2011).

However, the Third Circuit’s judicial scolding has had no discernible effect on the subsequent behavior of the parties.

Here is a portion of the Third Circuit’s scolding, which is also quoted in the “Conclusion” portion of the Bankruptcy Court’s allocation / distribution ruling:

Pensioner as Pawn

“We are concerned that the attorneys representing the respective sparring parties may be focusing on some of the technical differences governing bankruptcy in the various jurisdictions without considering that there are real live individuals who will ultimately be affected by the decisions being made in the courtrooms. It appears that the largest claimants are pension funds in the U.K. and the United States, representing pensioners who are undoubtedly dependent, or who will become dependent, on their pensions. They are the pawns in the moves being made by the Knights and the Rooks.

“Mediation, or continuation of whatever mediation is ongoing, by the parties in good faith is needed to resolve the differences. No party will benefit if the parties continue to clash over every statement and over every step in the process. This will result in wasteful depletion of the available assets from which each seeks a portion.”

[Bold face added for emphasis.]

[Editorial Note: This is the same Third Circuit Court of Appeals that will, ultimately, rule on the Bankruptcy Court’s allocation / distribution ruling, if the parties fail to reach a settlement first.

–Hmmmm, it’s not looking real good for the appellants right now.]

The Third Circuit Court’s worst-case prophecy is being fulfilled, as noted in the prior articles in this series.

Doesn’t everyone involved deserve better?


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