Former Nortel CEO Submits Claim to Bankruptcy Court for $12 Million

­Nortel's former CEO Mike Zafirovski has submitted a claim for over US$12 million from the company, with more than half going towards his company agreed pension. Zafirovski's claim, which has been filed with the  U.S. bankruptcy court that's dealing with Nortel's restructuring, seeks "not less than US$12,250,543.48".

The court will have to assess the merit of the claim, along with those filed by other former employees for severance payments and pension annuities. The claim by the former CEO has caused considerable media fuss as Nortel has several pension plans that are in deficit, meaning many former employees are unlikely to receive their full pension when they retire. The Quebec government had to step in to manage the pension assets of 6,000 Nortel Quebec beneficiaries for five years due to the shortfall.

Zafirovski and former directors, Harry Pearce, John Cleghorn, Bill Owens and Manfred Bischoff are also seeking protection from a US$100 million lawsuit filed by employees over losses in their retirement accounts.

"I think it's safe to say that I was shocked," said Tony Marsh, spokesman for a group called Nortel Retirees and former employees Protection Canada told CBC news. "I was amazed and I'm frankly staggered by his effrontery."

Mike Zafirovski resigned from Nortel with immediate effect in August when the company reported a 25% drop in second-quarter revenues and a more than doubling of the net loss to US$274 million.

Posted to the site on 11th October 2009