Nortel Files for Bankruptcy

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Financially struggling Nortel Networks filed for Chapter 11 in U.S. bankruptcy court Wednesday.

The financially ailing Canadian company is seeking creditor protection in the U.S., Canada and EMEA (Europe, the Middle East and Africa), it said in a statement.

Nortel gave "full consideration to the alternatives" to bankruptcy, but given the current economic downturn decided that bankruptcy is in the company's best interest long term.

The telecommunications equipment vendor will undertake "a comprehensive business and financial restructuring" and expects to emerge from the bankruptcy process "more focused, financially sound and competitive."

Nortel had a US$107 million bond payment due this week. Last month, the New York Stock Exchange informed the company it would be delisted if its share price did not rise above the minimum $1 within six months.

(More to follow.)

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