At their peak, and before another more recent consolidation, Nortel shares hit $124.50 on the TSX in July, 2000."
http://ca.news.yahoo.com/s/capress/090114/business/nortelTwo days ago, ex Deputy Prime Minister John Manley had this to say;
"Despite the threat, Nortel officials such as former federal finance minister John Manley are putting on a brave face.
"I think all of the bad stuff is behind us," said Manley, who is on the company's board of directors and said it is focused on building its future.
"Nortel has been our Canadian flagship. It has history, it has thousands of patents, and that's the kind of thing it's very hard to create ... and when you've got it, you really need to do everything you can to preserve it," he added."
www.cbc.ca/canada/ottawa/story/2009/01/12/ot-090112-nortel.html
Ok, I get it. I guess. Don't panic??
This one's easy. Saw the Nortel expert on the CBC, and only wish the rest of us could try that proposition.
ReplyDeleteOK, we are in debt to the tune of "x". We will never be in a position to pay that back. We owe "y" in interest due. If we can't pay the debt, why pay the interest and waste that money? We'll go into receivership, and debtors can settle for "z" cents on the dollar or go fly a kite.
It's beautiful. They can stay in business, might even get a government bailout of sorts, and executives can continue to draw high salaries and bonuses. Heck, Nortel has nothing to lose but its debts.
Personal bankruptcy would be neither that easy nor that beneficial!
Herb
ReplyDeleteI've seen that shell game before. Heck, some enterprising entrepreneurs set up businesses with the intent of putting them into receivership and using another of their companies to buy back the assets at a heavily discounted sum. Timing and how you structure it is everything in that little exercise.
I remember the first time I encountered this phenomenon. A good friend owned a Construction company that had done the excavation work for a new plant only to have it go this route. He was offered 20 cents on the dollar. He said, "your first loss is the best loss", and took the money.
Speaking of bankruptcies, I hired a fellow to work for me some years back who had undergone the failure of a small business he had operated. He said Revenue Canada's collectors weren't very kind, and quoted one of them. Apparently the good soul said,"Larry, you will pay the outstanding GST even if we have to take the rings off your fingers when you die".
One,
ReplyDeleteI am going to pass the CRA comment on to my new SIL, who is in a spot of bother over his construction company and GST!
Clement pledges $30 million in short term aid for Nortel.
ReplyDeletewww.cbc.ca/canada/story/2009/01/14/nortel-pol-reax.html
How about Nortel's past and who benefitted. This poorly run company has plenty to be suspicious of. Wreaks.
ReplyDelete