Verizon Communications has moved to block a planned $900 million sale of Nortel Network Corp.'s Government Solutions group and DiamondWare Ltd., a Nortel-owned maker of softphones, to Avaya Inc., arguing there will be "serious consequences to safety, welfare and security" because of feared disruption of U.S. government and military communications networks and emergency systems across the United States and Canada.
The dispute--which has a major customer objecting to practices of a major supplier, appears in part to be a contract dispute. Avaya of course says it intends to honor all existing Nortel contracts, but Verizon and Avaya apparently have not been able to agreement in language that suits Verizon.
An outstanding patent infringement lawsuit against Verizon in Texas, slated for trial next year, appears to be an issue. Avaya appears to believe Nortel might face some liability, and doesn't want to take over Nortel's "highly contingent" liability in the patent case.
If Avaya buys Nortel's business and leaves Verizon's contracts behind, Verizon will have only a few months to get a new source of equipment, software, maintenance and support for systems that are at the heart of U.S. emergency response, anti-terrorism and national defense systems, Verizon argues.
1 comment:
It would seem that no potential purchaser would want to take Nortel's liability in this matter. Then Verizon's issue isn't so much with Avaya, but with any future potential purchaser. Could the courts stop Nortel from selling itself to anyone?
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