Nortel Networks Files for Chapter 11 Bankruptcy Protection in U.S.

Nortel Networks (NYSE: NT), manufacturer of voice, video and data communications equipment, filed for Chapter 11 bankruptcy protection in a Delaware court on Wednesday.

Along with filing for bankruptcy protection in the U.S., Nortel is also seeking protection from creditors in Canada and Europe. Wednesday’s filing came just one day before a deadline that required the company make a $107 million interest payment.

News of the bankruptcy filing could cause Nortel to be delisted on the New York Stock Exchange and the Toronto Stock Exchange is considering doing the same.

In a statement posted on the company’s Web site President and CEO of Nortel Mike Zafirovski said, “I am convinced that by choosing this path at this time, we can put Nortel on sound financial footing once and for all. It will allow us to deal decisively with our cost and debt burden, restructure our business and narrow our strategic focus in an effective and timely manner.”

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