Nortel Announces Unsuccessful Conclusion of Mediation Proceedings

Nortel Announces Unsuccessful Conclusion of Mediation Proceedings 
TORONTO, ONTARIO -- (Marketwire) -- 01/24/13 -- Nortel(i) Networks
Corporation (OTCBB:NRTLQ) and Nortel Networks Limited announced today
that the mediation proceedings that had been commenced in respect of
the allocation of sale proceeds of Nortel's various business and
asset divestitures and other inter-estate matters, including
inter-company claims, have been terminated by the court-appointed
mediator. As previously announced, the courts overseeing Nortel's
creditor protection proceedings in Canada and the United States
directed the Nortel entities that are in creditor protection
proceedings in Canada, the U.S., and Europe, the Middle East and
Africa, as well as certain other interested parties, to participate
in a joint mediation of the afore-mentioned matters and appointed the
Hon. Warren K. Winkler, Chief Justice of Ontario, as the sole
mediator for the mediation. Following the holding of an all-party
mediation session, which began on January 14, 2013 and ended on
January 22, 2013 without any agreement having been reached on the
matters in dispute, the mediator announced on January 24, 2013 his
decision to terminate the mediation based on his conclusion that
further efforts at mediation are no longer worthwhile.  
In light of the unsuccessful conclusion of this mediation process,
which follows two previous failed attempts at achieving a mediated
solution, both the process for and timing of the ultimate resolution
of allocation and inter-company claims matters remains uncertain and
further delays in the resolution of these matters potentially could
be significant. Such delays would result in a corresponding
significant delay in the timing of distributions to holders of
validated claims of the various estates.  
About Nortel  
For more information, please visit Nortel Networks Corporation's
website at www.nortel-canada.com.   
Legal Disclaimer  
Certain statements in this press release may contain words such as
"could", "expects", "may", "should", "will", "anticipates",
"believes", "intends", "estimates", "targets", "plans", "envisions",
"seeks" and other similar language and are considered forward-looking
statements or information under applicable securities laws. These
statements are based
 on Nortel's current expectations, estimates,
forecasts and projections about the operating environment, economies
and markets in which Nortel operates. These statements are subject to
important assumptions, risks and uncertainties that are difficult to
predict, and the actual outcome may be materially different. Nortel's
assumptions, although considered reasonable by Nortel at the date of
this press release, may prove to be inaccurate and consequently
Nortel's actual results could differ materially from the expectations
set out herein. 
Actual results or events could differ materially from those
contemplated in forward-looking statements as a result of the
following: (i) risks and uncertainties relating to the Creditor
Protection Proceedings including: (a) risks associated with Nortel's
ability to: obtain required approvals and successfully consummate
remaining divestitures; successfully conclude ongoing discussions for
the sale of Nortel's remaining assets; develop, obtain required
approvals for, and implement a court approved plan; allocation of the
sale proceeds of our businesses and assets among the various Nortel
entities participating in these sales may take considerable time to
resolve; resolve ongoing issues with creditors and other third
parties whose interests may differ from Nortel's; maintain adequate
cash on hand in each of its jurisdictions to fund remaining work
within the jurisdiction during the Creditor Protection Proceedings;
obtain any further required approvals from the Canadian Monitor, the
U.K. Administrators, the U.S. Principal Officer, the U.S. Creditors'
Committee, or other third parties; utilize net operating loss
carryforwards and certain other tax attributes in the future; avoid
the substantive consolidation of NNI's assets and liabilities with
those of one or more other U.S. Debtors; operate effectively, and in
consultation with the Canadian Monitor, the Canadian creditors'
committee, the U.S. Creditors' Committee, the U.S. Principal Officer,
and work effectively with the U.K. Administrators and French
Administrator in their respective administration of the EMEA
businesses subject to the Creditor Protection Proceedings; continue
as a going concern; actively and adequately communicate on and
respond to events, media and rumors associated with the Creditor
Protection Proceedings; retain and incentivize key employees as may
be needed; retain, or if necessary, obtain court orders or approvals
with respect to motions filed from time to time; resolve claims made
against Nortel in connection with the Creditor Protection Proceedings
for amounts not exceeding Nortel's recorded liabilities subject to
compromise; prevent third parties from obtaining court orders or
approvals that are contrary to Nortel's interests; resolve disputes
regarding the allocation of sale proceeds of Nortel's various
business and asset divestitures and other inter-estate matters,
including inter-company claims; and 
(b) risks and uncertainties associated with: limitations on actions
against any Debtor during the Creditor Protection Proceedings; the
values, if any, that will be prescribed pursuant to any court
approved plan to outstanding Nortel securities and, in particular,
that Nortel does not expect that any value will be prescribed to the
NNC common shares or the NNL preferred shares in any such plan; the
delisting of NNC common shares from the NYSE; the delisting of NNC
common shares and NNL preferred shares from the TSX; the
discontinuance of preparing and filing NNC and NNL's quarterly and
annual financial statements and related filings under Canadian and/or
U.S. securities laws; and the cease trade orders that have been
issued by certain of the Canadian Securities Administrators to
prohibit trading in securities of NNC and NNL (subject to certain
limited exceptions) by reason of NNC and NNL's failure to file their
respective financial statements and related disclosure filings for
the third quarter of 2012 by the required filing deadlines; and (ii)
risks and uncertainties relating to Nortel's remaining restructuring
work including fluctuations in foreign currency exchange rates; the
sufficiency of workforce and cost reduction initiatives; any adverse
legal judgments, fines, penalties or settlements related to any
significant pending or future litigation actions; failure to maintain
integrity of Nortel's information systems; and Nortel's potential
inability to maintain an effective risk management strategy.  
For additional information with respect to certain of these and other
factors, see Nortel's Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and other securities filings with the SEC. Unless
otherwise required by applicable securities laws, Nortel disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.  
(i)Nortel, the Nortel logo and the Globemark are trademarks of Nortel
Networks.
Contacts:
Nortel
Media Relations
MediaRelations@nortel-canada.com
www.nortel-canada.com