Former Nortel CEO Mike Zafirovski is seeking more that $12 million from the bankrupt company, according to a filing in the US Bankruptcy Court for the District of Delaware.
Zafirovski, who failed to turn around the once venerable telecom giant after an accounting scandal, a series of financial restatements and the economic recession, wants no less than $12,250,543.48 from Nortel.
Meanwhile Canada.com reports that former employees of Nortel have pressed MPs to change federal bankruptcy legislation to provide more protection for pensioners and laid-off workers of insolvent companies. "It simply wasn’t feasible to pay severance," Zafirovski is reported to have told MPs on the House of Commons standing committee on finance, after a summons for him to appear before it.
Nortel filed for bankruptcy in January, began liquidating assets in June, and saw Zafirovski resign in August.
The breakdown of Zafirovski's payout claim is:
• $2.4 million in base salary for 24 months
• $3.6 million in bonuses
• $200,543.48 pro rata bonus for the third quarter of 2009
• $50,000 in insurance benefits
• And $6 million in a lump sum annuity.
Zafirovski claims his 2005 employment contract with Nortel entitles him to the millions. As Nortel sheds its businesses and assets, shareholders are not receiving any payback from their investments.
The blogosphere is expressing its disgust. All About Nortel’s Mark Evans says "As Nortel continues to disappear, the stream of head-shaking news continues to emerge."
And Billingworld.com says it is "at a loss for words over Zafirovski’s claim except to say that this is truly tool-like behavior."
Nortel declined to comment.