Nortel & Aerie

Aerie Network, founded by Kinder Morgan invbested in Nortel that was worth 400 billion dollars when it collapsed, leaving workers and investors – screwed!

Richard Kinder stands to win big in the pipe game in regards to Keystone. Google just purchased what is left of Nortel. Mixing computers with oil – will spell disaster! The Gideon Computer – is here!

Jon Presco

“Together, Aerie Networks and Nortel Networks will drive the high-
performance Optical Internet,” said Clarence Chandran, chief
operating officer, Nortel Networks. “Using our OPTera solutions,
Aerie Networks will be able to unleash a new era of unconstrained
bandwidth and profitable services, pushing the future boundaries of
capacity and speed in its network. This is another milestone in our
goal of delivering the benefits of the Optical Internet to consumers
and businesses across North America.”

In the late 1990s, stock market speculators, hoping that Nortel would reap increasingly lucrative profits from the sale of fibre optic network gear, began pushing up the price of the company’s shares to unheard-of levels despite the company’s repeated failure to turn a profit. Under the leadership of CEO John Roth, sales of optical equipment had been robust in the late 1990s, but the market was soon saturated. When the speculative telecom bubble of the late 1990s reached its pinnacle late in the year 2000, Nortel was to become one of the most spectacular casualties.

At its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange (TSX), employing 94,500 worldwide, with 25,900 in Canada alone.[24] Nortel’s market capitalization fell from C$398 billion in September 2000 to less than C$5 billion in August 2002. Nortel’s stock price plunged from C$124 to C$0.47. When Nortel’s stock crashed, it took with it a wide swath of Canadian investors and pension funds, and left 60,000 Nortel employees unemployed. Roth was criticized after it was revealed that he cashed in his own stock options for a personal gain of C$135 million in 2000 alone.[25]

CEO John Roth retired in 2001. His planned successor and chief operating officer, Clarence Chandran, already on sick leave due to complications following his 1997 stabbing in Singapore,[26] decided to quit, however.[27] Chief financial officer Frank Dunn was eventually chosen as Roth’s permanent replacement.

[edit] After the Internet bubble[edit] Accounting restatementsFrank Dunn presided over a dramatic restructuring of Nortel, which included laying off two-thirds of its workforce (60,000 staff) and writedowns of nearly US$16 billion in 2001 alone. This had some initial perceived success in turning the company around, with an unexpected return to profitability reported in the first quarter of 2003. The black ink triggered a total of $70 million in bonuses to the top 43 managers[28], with $7.8 million alone going to Dunn[29], $3 million to chief financial officer Douglas Beatty, and $2 million to controller Michael Gollogly[30]. Independent auditor Deloitte & Touche advised audit committee chairman John Cleghorn and board chairman “Red” Wilson to look into the suspicious results, who promptly hired the law firm WilmerHale to vet the financial statements.[31] In late October 2003, Nortel announced that it intended to restate approximately $900 million of liabilities carried on its previously reported balance sheet as of June 30, 2003, following a comprehensive internal review of these liabilities. The Company stated that the principal effects of the restatement would be a reduction in previously reported net losses for 2000, 2001, and 2002 and an increase in shareholders’ equity and net assets previously reported on its balance sheet. A dozen of the company’s most senior executives returned $8.6 million of bonuses they were paid based on the erroneous accounting. Investigators ultimately found about $3 billion in revenue had been booked improperly in 1998, 1999, and 2000. More than $2 billion was moved into later years, about $750 million was pushed forward beyond 2003 and about $250 million was wiped away completely. The accounting scandal hurt both Nortel’s reputation and finances, as Nortel spent an estimated US$400 million on outside auditors and management consultants to retrain staff.[31]

Dunn, Beatty, and Gollogly were fired on April 28, 2004 for financial mismanagement, and were later charged with fraud by the RCMP, with a trial date scheduled on January 16, 2012.[32][33] The SEC also filed charges against them, as well as four vice-presidents, for civil fraud.[32]

To improve Nortel’s liquidity in support of its operations, Nortel reached an agreement in 2003 with Export Development Canada for it to provide Nortel with a credit support facility of up to US$750 million.[34] Walter Robinson of the Canadian Taxpayers Federation denounced the line of credit, calling it “corporate welfare at its worst.”[35]

October 17, 2000

Aerie Networks Selects Nortel Networks for US$1 Billion Optical
Internet Solution

DENVER – Aerie Networks, the first company to introduce Mass
Produced BandwidthSM and User Defined NetworksSM, has signed an
agreement with Nortel Networks* [NYSE/TSE: NT] estimated to be worth
approximately US $1billion over four years to supply Optical
Internet solutions and services for its 20,000-mile nationwide
broadband network, subject to execution of definitive financing
agreements. The maximum amount of financing expected to be provided
by Nortel Networks will not exceed 50 percent of the value of the
supply contract at any one time.

Using solutions from the market-leading Nortel Networks OPTera*
portfolio, Aerie Networks plans to extend the power of the high-
performance Internet to 194 U.S. cities over 8.9 million fiber
miles. This will enable Aerie Networks to provide bandwidth and
services to carriers, content and application service providers,
local access and metropolitan area network providers and emerging
inter-city backbone providers.

“Using Nortel Networks OPTera family of solutions will position us
to build one of the most efficient, highest capacity networks ever
envisioned, making us the first company to mass produce bandwidth
and permanently change industry economics,” said Peter Geddis, Aerie
Networks chief executive officer. “We are pleased to work with the
world’s leader in Optical Internet capability, and we are confident
in Nortel Networks ability to keep ahead of the market with
groundbreaking optical solutions that will allow Aerie Networks to
continually enhance our bandwidth production capabilities.”
Aerie Networks has assembled nearly 15,000 miles of right of way
along the pipelines of 12 energy and communications companies who
are investors in Aerie Networks. Aerie Networks recently announced
that it has begun construction of the network between Chicago and
St. Louis, St. Louis and Kansas City, Kansas City and Dallas, and
Dallas and Houston. Network completion is slated for early 2004.
“Together, Aerie Networks and Nortel Networks will drive the high-
performance Optical Internet,” said Clarence Chandran, chief
operating officer, Nortel Networks. “Using our OPTera solutions,
Aerie Networks will be able to unleash a new era of unconstrained
bandwidth and profitable services, pushing the future boundaries of
capacity and speed in its network. This is another milestone in our
goal of delivering the benefits of the Optical Internet to consumers
and businesses across North America.”

The Nortel Networks Optical Internet solution for Aerie Networks
will include Nortel Networks OPTera family of products, which