Comments on article found at www.networkworld.com/news/2010/012110-nortel-analysts.html

I was a big supporter of Mike Zafirovski’s efforts. However, none of the efforts worked. They did not work because of timing. That is all of his actions were late – “A day late and a dollar short.”

I had been blogging about saving Nortel for a long time; my own blog, GLG’s blog, and even on Canadian blogs. It was not as if the actions being taken by Mike Zafirovski (then CEO of Nortel) were wrong but in the end none of the actions came in time.

The toughest thing about a restructuring is the timing. By the time most investors and creditors realize a specialized team is needed to turnaround a company it is usually too late to save the company unless extraordinary measures are taken. Of course there is also something I am fond of saying: “it all depends on you define a turnaround”.

Shareholder lawsuits and even pension fund issues aside, Nortel is in bankruptcy these folks are at the bottom of the list of parties to be compensated. In short, they usually only receive pennies on the dollar. For the argument’s sake lets assume these issues are not issues. Building a new Nortel out of the ashes of the old is a challenge only the most experienced (or craziest turnaround experts) would even attempt.

As I had said from the beginning of Nortel’s journey, a restructured Nortel will look different than the original Nortel. Read all of my past postings. If you keep that in mind, there may still be a way of saving what is left. The problem then becomes whether or not what is left of Nortel will provide sufficient critical mass of assets and IP to begin anew.

Could saving what is left be done? Yes but it will require experts who know how to do it. It’s been done before but at an enormously high cost and certainly what is left will not be what you started off with. In Nortel’s case, it will need support from the Canadian government.

A true recovery will require a miracle; the right investor(s) and management team.

The investor(s) will need to patient and willing to pour money into a very deep bowl. An investor that can bring strategic relationships to a resurrected Nortel would be ideal. The management team will need to be able to work under the gun and can make decisions in an environment that can be likened to an ongoing critical situation; think ongoing catastrophe.