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March 26, 2008 - Update
As a result of the high volume of claims filed, processing the claims has taken somewhat longer than expected. The claims processing has now been completed and class counsel have moved to have the courts approve the claims administrator's determinations and authorize an initial distribution of settlement proceeds to eligible claimants. As there are a number of disputed rejected claims, and other outstanding claims against the settlement, including the fees of U.S. plaintiffs' counsel (in Nortel I), it has been proposed that 10% of the remaining cash settlement funds be held in reserve instead of delaying distribution. Once these issues are resolved, a final distribution can be made at a later date.
The New York Court has approved the proposed initial distribution by Orders dated March 11, 2008 (for Nortel I) and March 17, 2008 (for Nortel II). The Ontario Court has approved the proposed initial distribution by Orders dated March 26, 2008. Please note that the Quebec Court (and in the case of Nortel I the B.C. Court) must approve the proposed distribution order before the settlement proceeds can be distributed. It is expected that approval will occur in Quebec and B.C. by the end of April 2008. The Orders approving the initial distribution of the class settlement proceeds can be viewed by clicking on the links below:
- Order of Judge Berman dated March 11, 2008 (New York) (Nortel I)
- Order of Judge Preska dated March 18, 2008 (New York) (Nortel II)
- Order of Chief Justice Winkler dated March 26, 2008 (Ontario) (Nortel I)
- Order of Chief Justice Winkler dated March 26, 2008 (Ontario) (Nortel II)
March 5, 2007 - Update
Madam Justice Michéle Monast, J.C.S. of the Quebec Superior Court approved the proposed Settlement for both Nortel I and Nortel II on January 31, 2007. The Ontario Superior Court of Justice approved both proposed Settlements on January 18, 2007 and the British Columbia Supreme Court approved the Nortel I Settlement on January 19, 2007. Once the settlement becomes effective (expected at the end of March, 2007, barring any appeals) the claims administration process can begin. It is anticipated, given the volume of claims to be processed, that it will take a number of months before distributions are made. As more precise information becomes available we will provide updates on this site. Please click here to view Justice Monast's decision. The decision is currently only available in French.
January 22, 2007 - Update
Mr. Justice Warren K. Winkler of the Ontario Superior Court of Justice approved an estimated $2.5 billion (USD) settlement last Thursday that resolves seven lawsuits in the United States, Ontario, Quebec and British Columbia as to whether Nortel Networks Corp. ("Nortel") misled investors during two separate class periods. The decision follows the approval of the settlement in the two U.S. class actions on December 26, 2006 by U.S. District Court Judges Richard Berman and Loretta Preska, and moves the settlement one step closer to final approval. On Friday, Justice Groberman of the Supreme Court of British Columbia also approved the settlement on behalf of British Columbia shareholders for the Nortel I class action. The settlement still requires approval by the Quebec Superior Court. To read the complete press release, please click here. To view Justice Winkler's Reasons for Decision, please click here.
Nortel I Class Action
On July 17, 2002, Rochon Genova LLP, with its co-counsel, Lerners LLP, commenced a proposed class action in the Ontario Superior Court of Justice against Nortel Networks Corporation ("Nortel"), and other defendants (the "Nortel I Class Action").
The Statement of Claim (as amended) alleges that Nortel and certain of its officers made (negligently) materially false and misleading statements and omissions in Nortel's financial reports and public statements, which had the effect of artificially inflating the price of Nortel's securities during the period of time between October 24, 2000 and February 15, 2001, inclusive (the "Nortel 1 Class Period"). The Statement of Claim (as amended) further alleges that Nortel and certain of its officers breached corporate and securities legislation, including the Canada Business Corporations Act, the Ontario Securities Act and the Competition Act. To view a copy of the Statement of Claim (as amended), please click here.
In July 2004, the plaintiffs in the Nortel I Class Action filed with the Ontario Superior Court of Justice and delivered their motion material for certification to the defendants.
Nortel II Class Action
On March 9, 2005, Rochon Genova LLP commenced a second proposed class action against Nortel and other defendants (the "Nortel II Class Action"). The Statement of Claim in the Nortel II Class Action alleges that the defendants are liable for misrepresenting Nortel's true financial situation by creating improper cash reserves and issuing false reports and financial statements that artificially inflated Nortel's earnings and the price of Nortel securities during the period of time between April 24, 2003 and April 27, 2004, inclusive (the "Nortel II Class Period"), and that Nortel's top executives used such reserves to trigger bonus payments payable in the event of Nortel's return to profitability.
The Nortel II Class Action also further alleges that Nortel and certain of its officers breached corporate and securities legislation, including the Canada Business Corporations Act, the Ontario Securities Act and the Competition Act. To view a copy of the Statement of Claim, please click here.
In November 2005, the plaintiff in the Nortel II Class Action filed with the Ontario Superior Court of Justice and delivered motion material for certification to the defendants.
During the pendency of the Nortel I and II Class Actions, Rochon Genova LLP and Lerners LLP have conducted investigations related to the claims and the underlying events alleged in the claims, including but not limited to, consultations with various experts on issues such as quantifying damages and assessing Nortel's business and accounting practices. Counsel for the plaintiffs have further conducted substantial research in respect of the causes of action asserted in the claims and in preparation for the pending certification motions.
The Global Settlement
On February 8, 2006, while the motions for certification were pending with respect to the above actions, Nortel announced that an agreement in principle was reached in relation to two class actions pending in the U.S. Federal District Court for the Southern District of New York (the "U.S. Class Actions") for a global settlement of certain shareholder class actions in Canada and the U.S., including the within actions (the "Global Settlement" or "Settlement"), for, among other benefits, payment of US$575 million in cash and the issuance of 628,667,750 of its common shares (representing 14.5% of Nortel's current equity).
On March 17, 2006, Nortel further announced that its insurers agreed to pay US$228.5 million in cash as part of the proposed Global Settlement.
Following the announcement of the agreement in principle in February 2006, counsel for the plaintiffs in the Nortel I and II Class Actions, as well as other related class actions pending in British Columbia and Quebec have worked cooperatively with Nortel's counsel and counsel to the lead plaintiffs in the U.S. Class Actions to negotiate the details of the settlement, to draft the Stipulation and Agreement of Settlement (the "Stipulation") and to coordinate the settlement process.
On June 20, 2006 the plaintiffs and Nortel entered into a Settlement Agreement. The Settlement is contingent upon Court approval of the Settlement of the Nortel I and II Class Action, the U.S. Class Actions, and related actions against Nortel and other defendants in Quebec and British Columbia.
On June 27, 2006, the Nortel I and II Class Actions were certified by the Honourable Mr. Justice Winkler as class actions in order to give effect to the Settlement. The Court decided that anyone who fits the following class definitions are members of the classes in the Nortel I and II Class Actions:
Nortel I Class Action: "All persons and entities, except Excluded Persons and members of the British Columbia Class and the Quebec Class, who, while resident in Canada at the time, purchased Nortel common stock or call option on Nortel common stock, or wrote (sold) put options on Nortel common stock during the Nortel I Class Period." ("Ontario National Class")
Nortel II Class Action: "All persons and entities, except Excluded Persons and members of the Quebec Class, who, while resident in Canada at the time, purchased Nortel common stock or call option on Nortel common stock, or wrote (sold) put options on Nortel common stock during the Nortel II Class Period." ("Ontario National Class")
Mr. Justice Winkler also approved the form of the Notice and Proof of Claim form that will be mailed to class members. To view the Settlement Notices, please click the links below:
Nortel I Settlement Notice
Nortel II Settlement Notice
To view a copy of the certification Order in the Nortel I Class Action, please click here.
To view a copy of the certification Order in the Nortel II Class Action, please click here.
Claims Administration
The entity that will be responsible for notifying class members and administering the settlement is The Garden City Group, Inc. ("GCG"). Representatives of GCG will be available to assist class members with any questions they have about the Settlement, including how to submit a Proof of Claim form, how to object to the Settlement and how to request exclusion from the Ontario National Class.
If you have any questions and are a member of the certified class in the Nortel I Class Action, you may contact GCG at the following contact information:
Nortel I Securities Litigation Settlement
c/o The Garden City Group, Inc. Claims Administrator
P.O. Box 9000
#6446 Merrick, NY 11566-9000
1 (866) 881-7495
www.nortelsecuritieslitigation.com
If you have any questions and are a member of the certified class in the Nortel II Class Action, you may contact GCG at the following contact information:
Nortel II Securities Litigation Settlement
c/o The Garden City Group, Inc. Claims Administrator
P.O. Box #9082
Dublin, OH 43017-0982
1 (866) 881-7495
www.nortelsecuritieslitigation.com
As noted above, the Courts in charge of the various Canadian and U.S. Class Actions subject to the Settlement still have to decide whether to approve the Settlement. Payments will be made to class members with "recognized claims" only if all the Courts approve the Settlement and after appeals, if any, are resolved. Please be patient.
Important Dates:
The following is a list of important dates:
Deadline for GCG to mail Settlement Notices to Class Members -- July 21, 2006
Publication of Summary Notice -- End of July, 2006
Deadline to opt-out of or request exclusion from the class actions and Settlement -- September 19, 2006
Deadline to file an objection to the Settlement -- September 19, 2006
Settlement Fairness Hearngs in the U.S. Class Actions -- October 26, 2006
Settlement Approval Hearings in the Ontario Nortel I and II Class Actions -- November 6, 2006
Settlement Approval Hearings in the Quebec Nortel I and II Class Actions -- November 16, 2006
Deadline to submit a Proof of Claim & Release form to GCG -- November 20, 2006
Settlement Approval Hearing in the British Columbia Nortel I Class Action -- November 27, 2006
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