Nortel Accuses GENBAND of Carrier VoIP Bait and Switch

Nortel Networks and GENBAND, once in sync over the sale of bankrupt Nortels carrier VoIP unit, now appear to be at odds.

This week, in court papers, Nortel accused GENBAND of drastically and improperly” trying to pay less for the carrier VoIP assets, Reuters reported. Instead of handing over $179.5 million, as originally agreed, GENBAND wants to lower the price to $142.9 million, Nortel said.

“This is a disagreement about the clear terms of the sale agreement and, in particular, Genband’s attempt to disregard those clear terms,” Nortel said, according to Reuters.

A GENBAND spokeswoman told PHONE+ and VON/xchange the company does indeed “have a dispute with Nortel regarding the computation of the final purchase price.”

Kim Lee said GENBAND has tried to settle the dispute with Nortel but that Nortel refuses to go to arbitration, as required in the companies’ contract. So, GENBAND is asking a court to force Nortel into arbitration so the two parties may reach an agreement.  

Earlier this year, GENBAND bought Nortels Carrier VoIP and Applications Solutions division, or CVAS, at an uncontested auction, and closed the deal just a few months later.

Nortel, once the largest telecom equipment maker in North America, filed for bankruptcy protection on Jan. 14, 2009, after a series of financial scandals and leadership problems, and as the global economy collapsed. Nortel remains about $3 billion short in the amount it owes to creditors; the money it has raised from auctions has been done at the expense of pensioners and retirees, most of whom will lose their benefits at the end of next month.