Nortel Bankruptcy UpdateNortel Bankruptcy Update

Via Reuters, it looks like Nortel is preparing for layoffs in the course of its bankruptcy protection proceedings. Reuters flags the website of the court-appointed monitors, Ernst & Young, where you can find documents in the case on an ongoing basis. E&Y last week filed a report recommending approval of Nortel's request for an extension on the deadline of its restructuring plan, to May 1.

Via Reuters, it looks like Nortel is preparing for layoffs in the course of its bankruptcy protection proceedings. Reuters flags the website of the court-appointed monitors, Ernst & Young, where you can find documents in the case on an ongoing basis. E&Y last week filed a report recommending approval of Nortel's request for an extension on the deadline of its restructuring plan, to May 1.Of note from that report: Ernst & Young reports that the company is on track for a cash burn of $90 million between February 1 and May 2 ($348 million coming in, $438 million going out). They state that Nortel has begun initiatives including "a detailed plan for a reduction of its global workforce," as well as repudiation of leases on 2 corporate aircraft, which is estimated to save the company $1 million per month.

Of note given the impending additional layoffs is that E&Y reports that "severance payments are stayed and considered as unsecured claims." However, Nortel, in hopes of not falling behind in R&D will be allowed to continue an incentive program for employees who earn patents. That program is estimated to cost the company $1 million per year.