Nortel to File for Bankruptcy: Report

The move will likely see the telecom manufacturer broken up and sold to foreign rivals, a report says.
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Nortel Networks

(NT)

is expected to file for bankruptcy protection as early as Wednesday, reports Toronto's

Globe and Mail

.

Citing sources, the newspaper said the move will likely see the technology company broken up and sold to foreign rivals.

Nortel's board met Tuesday night to deal with a "financial crisis," the report says, as the economic downturn translates into a sharp drop in orders from phone company clients. Nortel, which manufactures telecom hardware, failed to find buyers for a number of divisions that were put up for sale in September. The company also faces the prospect of paying $107 million of interest on its debts Thursday, the

Globe and Mail

reports.

The company plans to seek court approval for creditor protection as early Wednesday morning in Toronto and an undisclosed U.S. location, the sources said. Executives at Nortel, which was Canada's largest company at the peak of the technology boom in 2000, had no comment on the company's plans, according to the newspaper.

This article was written by a staff member of TheStreet.com.