Lawyers for Nortel will take the stand at the Royal Courts of Justice today for the second day of the hearing over the firm's handling of its pension scheme.
By submitting your personal information, you agree that TechTarget and its partners may contact you regarding relevant content, products and special offers.
The networking vendor teamed up with bankrupt financial services firm Lehman Brothers in September to jointly protest claims by the Pensions Regulator which, if successful, will leave Nortel liable for a section 75 deficit of up to £2.1bn in its UK pension scheme.
The Regulator has already issued a Financial Support Direction (FSD) against Nortel, requiring companies within the group to provide financial support to cover the shortfall.
This was in defiance of an earlier ruling in the Delware bankruptcy court made in March, which forbade lawsuits against Nortel's estate while it remains under Chapter 11 protection.
The administrators, Ernst and Young for Nortel and PwC (formerly PricewaterhouseCoopers) for Lehman Brothers, are arguing that the firms' pension schemes cannot be viewed as secured creditors in the same way as a lending bank, for example.
Nortel representatives claim that the Pensions Regulator had no authority to issue an FSD against a company in liquidation.
Having to find an additional £2.1bn from its estate would be virtually impossible for Nortel, which has only generated $3.2bn (£2.02bn) from its eighteen-month closing down sale.
However at the same time about 43,000 UK-based Nortel workers will face a bleak future if the challenge is unsuccessful.
The case also has wider implications for the handling of pension deficits in UK insolvency law, and could result in serious problems for administrators should the case end in the trustees' favour.