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June 23, 2009 4:29 PM

Cleary, Skadden Advise on Nortel Asset Sale to Nokia

Posted by Claire Zillman

Nortel, the bankrupt Canadian phone -equipment maker that once had a market valuation of $250 billion, agreed Monday to sell its most lucrative asset to Nokia Siemens for $650 million by the third quarter of this year.

Nortel, once Canada's largest company by market value, is selling off its wireless assets in an attempt to make a dent in the $3.6 billion in bonds it owes creditors, a debt that forced the Ottawa-based company to file for bankruptcy in January.

Its profits have waned since the tech bubble burst in 2000, compounded by heightened competition in recent years from Cisco Systems and Juniper Networks. DealBook reports that Nortel posted losses of about $7 billion over a two-year span.

A team from Cleary Gottlieb Steen & Hamilton handled the matter for Nortel, led by bankruptcy partner James Bromley and including bankruptcy partner Lisa Schweitzer. Bromley billed Nortel $2 million in one month alone, the Ottawa Citizen reported earlier in June.

The Cleary M&A team includes partners Paul Shim, Dan Sternberg, and Donald Stern. Cleary Gottlieb partner Craig Brod is advising on securities matters and Len Jacoby is advising on intellectual property aspects of the transaction. Partner Steve Horowitz is advising on real estate matters and Arthur Kohn is providing employee benefits advice.

Nortel already owes several other law firms more than $1 million each. The AmLaw Daily reported that Derrick Tay of Ogilvy Renault is serving as Nortel's Canadian counsel.

Skadden, Arps, Slate, Meagher & Flom counseled Nokia on the deal, led by partners Lynn Hiestand, Michal Berkner, and Scott Simpson, all resident in the firm's London office. Sharon Geraghty, an M&A partner at Toronto-based Torys, also advised Nokia on the matter as local Canadian counsel.

Reuters reports that the deal will boost Nokia's market share of mobile infrastructure in North America to 30 percent, up from 5.5 percent. In addition to wireless technology, Nokia has the chance to acquire at least 2,500 Nortel employees in the deal, Dealbook reports.

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