Nortel Claim Trading in Disarray Following Judges’ Novel Theory Distributing $7.3 Billion

The liquidation of Nortel Networks Corp. might now be called the “Revenge of the U.K. Pensioners for the War of Independence,” after decisions this week by judges in the U.S. and Canada allocating $7.3 billion of sale proceeds among warring creditor factions around the world.

Joe Sarachek, a managing director of special situations at CRT Special Investments LLC, bestowed that title on the Nortel bankruptcy, which that turned six years old in January and is nowhere near making distributions to creditors. Sarachek said the decision sent the market for Nortel debt into “total disarray.”

As a trader in debt of ...