Reading more closely, it looks like the shares will trade for a while.
"Nortel doesn't expect" that shareholders will receive value from the "creditor protection proceedings" means that there are still unresolved proceedings going on that are designed to protect shareholders and other creditors to Nortel. We still, at least for now, have a fighting chance it seems.
Nowhere does it say "shares are now to be terminated" at all, only that Nortel, "as previously announced," doesn't expect the creditor protection proceedings to fall in favor of the shareholders.
First of all, if the shares are worth less, this makes that result more likely, as there is less cash involved and therefore less incentive to rule for the shareholders.
Also, it is therefore in Nortel's interest to publish that they "don't expect" the shareholders to benefit for exactly that reason: the share price goes down and they are more likely to NOT have to pay anything to shareholders.
Finally, the possibility of Nortel's shareholders getting nothing here is infuriating. Not only because I AM one, but also because of the sheer principle of it. NRTLQ's market cap is now less than $50 Million. Nortel is sitting on $2 Billion in cash plus the proceeds from this sale, and a large portion of their employees are going to still be employed through this transition.
Where is the money going if not to the company's creditors? What happened to Enron when they cooked their books, went out of business, and screwed their shareholders? They were forced to pay up, weren't they?
I bet we see some more action in this regard. See Visteon and Wamu, both have legal teams fighting for the shareholders at the very last minute.
Until the fat lady sings, we're still trading and they're still on the hook to pay their creditors. Until then, the only reason I care about what Nortel "expects" is because the share price will probably drop just like they want in the meantime.
Cheers,
BK
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