July 27, 2009 4:09 PM

Paul, Weiss, Cleary on Ericsson / Nortel Asset Sale

Posted by Matt Straquadine

Last week we told you about the ongoing firesale at Nortel Networks, the bankrupt Canadian wireless telecommunications company. We also mentioned that Nortel had signed a deal to sell its wireless division to Nokia for $650 million.

But over the weekend, Ericsson announced it had submitted a winning bid of $1.3 billion for Nortel's wireless assets, besting Nokia's offer, which was submitted last month in a "stalking horse" agreement that uses the purchase offer as the low bid in the bankruptcy auction. 

During the auction, Ericsson submitted a higher bid, snatching up Nortel's most profitable division.

News of the Swedish wireless company's coup irked the folks over at Research in Motion, the Canadian company that makes the Blackberry. R.I.M. told the New York Times' Dealbook it was interested in the division and had planned to bid $1.1 billion but had been shut out of the auction.

The company is calling for the Canadian government to investigate the sale, with some arguing that Nortel assets should remain in Canadian hands because Nortel has benefited over the years from government assistance. U.S. and Canadian courts still have to approve the deal before it is final.

Ericsson was advised by a legal team from Paul, Weiss, Rifkind, Wharton & Garrison led by partners Marilyn Sobel and Jeffrey Marell, neither of whom were available for comment.

Lawyers from Cleary Gottlieb Steen & Hamilton have represented Nortel since it filed for bankruptcy in January, led by New York partner James Bromley, who couldn't be reached for comment. 

Bromley is also representing Nortel on the proposed sale of its enterprise solutions business to Avaya, a deal that could also lead to a bidding war at an auction scheduled for September. Since January, Cleary Gottlieb has billed Nortel $10.2 million in legal fees and costs for its work on the bankruptcy.  

Two Canadian firms also advised on the deal.  Blakes, Cassels and Graydon represented Ericsson in the deal, and Ogilvy Renault, lead by partner John Stirling, advised Nortel.

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