Elliott Greenleaf successfully persuaded the Bankruptcy Court to appoint an official committee to represent roughly 245 long-term disabled employees, whose benefits cost $1 million per month in the In re: Nortel bankruptcy cases on June 21, 2011. The official committee will have funds provided by Nortel to hire lawyers and financial advisors. The ruling allows the disabled employees to be adequately represented in the negotiations over their claims against the estate and the transition expected as the company will be closing its doors in the near future. Nortel filed for bankruptcy in early 2009 and has been selling off various assets and entities, with plans to shut down. Delays attendant to a dispute by various interested parties on the distribution and allocation of proceeds from the bankruptcy sales has in part prevented the company from progressing forward to complete the bankruptcy process. The company is also continuing an auction for its patent portfolio, which has drawn great interest, and is one of the biggest sales of its kind. The appointment of committees in addition to the committee of unsecured creditors is rare and usually limited to retiree committees in most bankruptcies. An independent committee for long term disability plan participants is unprecedented. A combined committee of retirees and disabled employees, an option which was proposed by the objecting parties, but that was ultimately rejected by the Court, has lead to conflict issues in the insolvency of Nortel’s corporate entities in Canada, which is proceeding in parallel to the U.S and European proceedings.

Overcoming objections from the Debtors, the Official Committee of Unsecured Creditors, and the United States Trustee, Elliott Greenleaf’s lawyers were able to convince the Judge and, eventually, the objecting parties, of the necessity of relief for the debtors’ disabled employees. The relief requested is significant as the disabled employees are a diverse group in terms of economic means; and only some have been able to contribute to their representation in the bankruptcy cases on a very limited basis. A large number have no such ability. Some of the disabled employees are able to function on their own volition despite their disability, but many are under guardianship and unable to care for themselves without full time care. It is no understatement that all of them are severely disabled and the result of the disposition of their interests in this bankruptcy case will be life changing for them. Elliott Greenleaf’s efforts are lead by Rafael Zahralddin, Deborah Simon and Shelley Kinsella.