Nortel Deflects Verizon, Avaya Deal Moves Ahead

Avaya sale clears a pair of legal hurdles as $900 million sale nears close.

By Sean Michael Kerner | Posted Sep 18, 2009
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Nortel's $900 million deal to sell off its Enterprise business assets to Avaya is moving forward. Late Wednesday, U.S Bankruptcy Court judge Kevin Gross issued an order authorizing and approving the sale.

Avaya was named the winner of the Nortel Enterprise auction earlier this week. The Nortel division has been up for sale since July when Avaya entered its first bid.

The deal had been facing opposition from Verizon, on the grounds that the sale would impact U.S national security interests. Verizon is a Nortel customer and they were concerned that a sell-off would impact the support agreements the two companies currently have.

Verizon's opposition to the deal could potentially have delayed or derailed the Avaya Nortel deal, but that is no longer the case.

In court documents filed by Nortel in response to Verizon's opposition, Nortel struck out at Verizon's opposition as being one influenced by money.

"Here, the potential rejection of Verizon's contracts is nothing but an economic matter for a wealthy company," Nortel stated in its legal filing response. "Verizon has the resources, the wherewithal and most importantly, the alternate suppliers to service its customers in the event of rejection."

Joel Hackney, Nortel's president of Enterprise Solutions stated on Monday during a press conference call that Nortel did not expect Verizon's opposition to hinder the deal. Additionally he noted that Nortel was committed to supporting customers.

For its part, Verizon is still working toward ensuring that their Nortel equipment is supported under Avaya's ownership. Read the rest at InternetNews.com.

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