www.lexisnexis.ca Vol. 31, No. 8 July 2015
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‘Unprecedented’ Nortel ruling spans two nations

One of the largest corporate failures in Canadian history has led to an unusual and controversial multi-jurisdictional decision, as judges in Canada and the United States simultaneously ruled that the remaining U.S. $7.3 billion in assets of bankrupt Nortel Networks Corp. must be distributed on a pro-rata basis to the company’s worldwide subsidiaries, for ultimate delivery to creditors.

Nortel represented an unprecedented case involving insolvencies of many corporations and bankrupt estates in different jurisdictions, said Ontario Superior Court Justice Frank Newbould.

“Insolvency practitioners, academics, international bodies, and others have watched as Nortel’s early success in maximizing the value of its global assets through co-operation has disintegrated into value-erosive adversarial and territorial litigation described by many as scorched-earth litigation. The costs have well exceeded $1 billion,” wrote Justice Newbould in Nortel Networks Corp. (Re) [2015] O.J. No. 2440.

SEC’s Schnurr backs off idea of optional U.S. IFRS

Securities and Exchange Commission chief accountant James Schnurr has backed away from an idea he floated last December allowing some U.S. companies the option of providing supplemental IFRS-based information in their financial statements prepared according to U.S. GAAP.

At a recent conference, Schnurr said that stakeholders seem to have no appetite for this type of information, so the idea is off the table for now.

He did stress, though, that there continues to be strong support for a single set of high-quality global accounting standards — it just isn’t IFRS for the foreseeable future. At the same conference, Schnurr promised to make a recommendation to SEC chair Mary Jo White on the best way to move forward on the issue.

The chief financial officer’s role will continue to be driven by multiple pressures in a fluid, ever-changing environment and grow more complex, say members of two influential global accounting organizations.

“CFOs are so used to seeing things as either black or white, but we don’t have the luxury of that anymore,” said Quin Thong, the Hong Kong-based finance director for Greater China with Baronsmead Consulting, in the report “Accountants for business: Tomorrow’s finance enterprise.”

The report was prepared jointly by the Institute of Management Accountants (IMA), based in Montvale, N.J., and the Association of Chartered Certified Accountants (ACCA), headquartered in London.

A jury has found a group of Ottawa-based technology providers not guilty of 60 charges of bid-rigging and conspiracy after an eight-month criminal trial, in a case that provides guidance and brings greater clarity over the reach of Canadian bid-rigging laws.

The Crown will not appeal the verdict, said Sujata Raisinghani, spokesperson for the Public Prosecution Service of Canada (PPSC).

The decisive setback for the PPSC and the Competition Bureau led the Crown to also drop an earlier appeal in a related case against a directed verdict of former defendant David Watts, also charged with bid-rigging, and stayed bid-rigging charges in a related action against five other defendants, in a case that was scheduled to be heard this August in a judge-only trial.