Tech Consortium Acquires Nortel Patents for US$4.5 Billion
Goodmans represented Ernst & Young Inc., the CCAA Monitor and the foreign representative for the Canadian proceeding under the Chapter 15 recognition proceedings of the U.S. Bankruptcy Code to Nortel Networks in connection with Nortel’s patent sale to a technology consortium for US$4.5 billion.
On April 4, 2011, Nortel Networks Corporation [OTC: NRTLQ] announced that its subsidiary Nortel Networks Limited, and certain of its other subsidiaries, including Nortel Networks Inc. and Nortel Networks UK Limited (in administration), had entered into a stalking horse asset sale agreement with Google Inc. for the sale of all of Nortel’s remaining patents and patent applications for a cash purchase price of US$900 million. On May 2, 2011, Nortel obtained approval from the United States Bankruptcy Court for the District of Delaware and the Ontario Superior Court of Justice approving the “stalking horse” asset sale agreement with Ranger Inc., a wholly owned subsidiary of Google Inc. for the sale of Nortel’s patent portfolio. The auction held the last week of June generated an aggressive competition between the world’s top telecommunications and technology companies. After a multi-day auction, a consortium of technology companies, Rockstar Bidco emerged as the winning bidder. On July 29, 2011, Nortel completed the sale of its patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corporation, Research In Motion Limited and Sony Corporation, for US$4.5 billion in cash. The sale included more than 6,000 patents and patent applications spanning wireless, wireless 4G, data networking, optical, voice, internet, service provider, semiconductors and other patents. The transaction is considered to be the highest value sale of technology patents in history.