Criticism of Nortel

This article concerns criticism of Nortel, a multinational telecommunications equipment manufacturer headquartered in Toronto, Ontario, Canada. The criticisms outlined below revolve around reliance on taxpayers money to operate the company , and excessive compensation for Nortel executives.
Criticism and controversy
Executive compensation
2003
In 2003 Nortel paid tens of millions of dollars in so-called "return to profitability" bonuses, largely to a select group of senior managers.
The "return to profitability" was a fabrication achieved by the release of $490 million in reserves to boost earnings.
2008
In 2008, despite continuing losses, layoffs and declining share prices at the struggling telecom-gear maker, Nortel Networks CEO Mike Zafirovski is awarded a 21.5-per-cent pay increase to $10.1 million.
2009
As Nortel entered protection from creditors proceedings, it paid out retention bonuses to almost 1,000 top executives, totalling up to US$45 million,
drawing criticism as the company withheld severance payments to employees laid-off prior to the creditor protection filing. Nortel proceeded with thousands of additional layoffs without severance, and the pension fund remained underfunded, while Nortel paid $14.2 million in cash to seven executives. Nortel also paid $1.4 million to ten former and current directors, and paid $140 million to lawyers, pension, human resources and financial experts helping to oversee the company’s bankruptcy proceedings.
Also in 2009, John Roth, former Nortel CEO who retired under controversy in 2001, filed a U.S. creditor claim in a U.S. bankruptcy court on Dec. 1,2009, seeking a $1 billion U.S. indemnification from Nortel of his personal assets with respect to a series of class action lawsuits filed by former employees.
2010
In a U.S. court filing on February 11, 2010, Nortel proposed to spend $92.3M on retention bonuses for 1,475 employees in its Nortel Business Services and Corporate groups. According to the plan, Christopher Ricaurte, president of Nortel Business Services, will receive $2.5 million in incentives. In all, Canadian employees are eligible for $27 million, U.S. employees $55 million, and about $10 million will go to others. This proposed plan came the same week Nortel negotiated a $57-million deal to wind up health care and other benefits for former Canadian employees. Claiming that the retention bonuses proposal is extraordinary, acting US trustee, Roberta DeAngelis, objected to the payment of $555.6 million to 866 employees. However, court appointed representatives for Nortel former employees, who are creditors in the Ontario bankruptcy court, have to not oppose any employee incentive program.
Illegal breach of trust in Nortel's Health and Welfare trust
There have been reports of financial irregularities at Nortel's Health and Welfare Trust. Dianne Urquhart, a financial analyst, testified before a parliamentary committee that $100 million is missing from the HWT and that a $37 million loan to the corporation has not been paid back. The HWT was an unregistered trust maintained by Nortel to provide medical, dental, life insurance, long-term disability and survivor income and pension transition benefits.

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