Nortel files for bankruptcy protection

Nortel Networks, a manufacturer of telephone equipment, filed for bankruptcy
protection in the US, amid the global credit crunch and declining sales. Based
in Toronto, the company had more than $1 billion in assets and debt. It is
reported that several of its Canadian affiliates will also seek court
protection. Nortel has lost almost $7 billion since 2005, which has left CEO
Mike Zafirovski struggling for the funds to operate the company, especially in
the wake of stiff competition from Cisco and Juniper Networks.

Sales have declined since Nortel sold its high-speed mobile phone unit to
Alcatel for $320 million in 2006. The company got rid of the division to focus
on a newer wireless technology called WiMax. It also faced turmoil when some
investors filed suit against it for alleged manipulation of its accounts. Last
year, Canadian police charged two of its former top executives with fraud for
allegedly fiddling the company's books in 2002 and 2003.