Nortel's Ex-CEO Seeks $12M in Suit

Former Nortel Networks ( NT) CEO Mike Zafirovski is seeking more than $12 million from the bankrupt telecom equipment maker, just two months after leaving the company.

According to court documents, Zafirovski is claiming $2.4 million in base salary and a performance-related bonus of $3.6 million. The one-time Motorola ( MOT) executive also is claiming pension benefits of "not less than" $6 million from the failed tech giant.

The Nortel chief stepped down in August, having reached what was described as a "logical departure point" by the company's board. Unable to turn Nortel around, Zafirovski's departure followed a turbulent spell that saw the company enter Chapter 11 and begin carving off its assets. The Canadian firm announced plans to liquidate during the summer, spelling the beginning of the end for the 127-year-old company.

The former Motorola COO was parachuted in to save beleaguered Nortel in 2005 but instead presided over its death throes. The company's carve-up continued this week, with Ciena ( CIEN) agreeing to pay $521 million in cash and stock for Nortel's optical and Ethernet divisions.

Zafirovski's lawsuit comes at a time when many Nortel retirees are urging Canadian lawmakers to protect their company pensions, and has already provoked outrage in the blogosphere.

"As Nortel continues to disappear, the stream of head-shaking news continues to emerge," wrote Mike Evans on the All About Nortel Web site.

The lawsuit, which was filed in the U.S. Bankruptcy Court for the District of Delaware, says that Zafirovski's employment terms were laid out in a 2005 contract. The former CEO, however, is not the only Nortel luminary seeking money from the troubled firm.

Former and current Nortel executives are seeking a total of $25 million in new claims from the company, according to a report in the Ottawa Citizen this week.

Nortel has not yet responded to TheStreet's request for comment on this story.

-- Reported by James Rogers in New York

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