Nortel Networks, formerly the Nortel Telecom Limited, was a multinational telecommunications company with headquarters in Canada. In 2012, top executives at Nortel, including CEO Frank Dunn, were accused of cooking the books. Accruals were shifted in order to prevent profit which would trigger employee bonuses. Frank Dunn specifically was accused of encouraging the manipulation of numbers to make his company seem more profitable at good times so that he and other executives would receive bonuses. Only financial statements would reveal the scam. The company went bankrupt in 2009.
1. January 14, 2009
Nortel Networks Corporation and other affiliated companies were given protection from their creditors under the Companies’ Creditors Arrangement Act (CCAA).
2. July 30, 2009
Representing former employees of Nortel and those receiving long term disability benefits, Koskie Minsky was hired to assist with future claims. There are no claims at the present moment as Nortel pays for the claims to disability.
The company originated in 1885 when Bell created a mechanical department to manufacture telephones and telephone equipment. In 1889, the department started to manufacture the first switchboard. The Nortel company was not incorporated until 1895 under the name Northern Electric & Manufacturing Company Ltd.
The name changed to Northern Telecom Ltd in 1976. The company aimed to focus on digital technology. The following year, it introduced its DMS line of Digital Central Office Telephone Switches. The new development was a success.
Northern Telecom/Nortel was the first non-Japanese company and supplier to market its switches in Europe and China.
The name changed to Nortel Networks in 1998 to deal with the change of focus. Nortel now was providing solutions for multiprotocol, multiservice, global networking over the Internet.
When Frank Dunn became CEO, the company underwent massive restructuring and layoffs. The company was no longer prospering.
In 2004, Dunn and 2 other executives were fired for financial mismanagement. This case is still under investigation as of January of 2012.
Nortel has had a large presence in the United States since 1971. R & D and Software Development were all located in the United States.
Although the company has filed for Chapter 11, it is awaiting a buyer to bail them out. It is uncertain what the future may hold for this company.