Business
Nortel pensioners squeaking by

Vic King, 75, is photographed in his Kanata home Monday, Jan. 14, 2013. King lost his health insurance and saw his pension slashed by nearly half after Nortel went bankrupt. He and his wife are struggling to make ends meet while fighting locally to have the rights of pensioners put ahead of stakeholders being paid out in the wake of the bankruptcy.

Credits: QMI

MICHAEL AUBRY | QMI AGENCY

OTTAWA - When telecommunications company Nortel crashed, Victor King nearly lost everything.

King, 75, had nearly every penny drained from his life insurance and lost almost half of the pension that supports him and his wife.

He joined more than 4,000 other retirees in the Ottawa area who saw their pensions and benefits slashed when the mammoth company filed for bankruptcy in 2009.

"It's been very challenging," he said.

There's still a pot of $9 billion that has to be paid out after the bankruptcy, and bondholders are fighting pensioners to get their hands on the money.

Yet there are more than $20 billion in pension claims from former Nortel employees.

Just how much King and other retirees receive will control how much they get for a pension.

There are mediations going on all week finishing on Friday that will dole out the money. But under Canadian law, bondholders have first priority over pensioners.

That's unfair, said Anne Clark-Stewart, director of Nortel Retirees and Former Employees Protection.

"We feel this is an egregious assault on pensioners," she said.

With the average age of Nortel retirees now at 76, she said many can't afford to cover their medical costs or are passing away without life insurance to help their families.

She's hoping for the best from mediation, but the outlook is bleak.

Fraud charges against three former Nortel senior executives accused of manipulating Nortel's balance sheets were dismissed Monday after a year-long trial.

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