Nortel Networks Corp. (NRTLQ) won court permission to hold an auction for its portfolio of wireless technology patents, with Google Inc. (GOOG) making the opening bid of $900 million.
Two judges in the U.S. and Canada approved rules for the June 20 auction during a joint hearing today linked by video. The judges also approved a $25 million breakup fee for Google, should another company outbid the Internet search company.
“Certainly the sale of approximately 6,000 patents is a major sale,” U.S. Bankruptcy Judge Kevin Gross in Wilmington, Delaware, said today.
Google last month became the so-called stalking-horse bidder under an agreement that guarantees a sale for $900 million if no other offers come in. A second bidder will have to offer Nortel at least $929 million and subsequent bids must be at least $5 million more, according to the bidding rules.
Nortel filed for bankruptcy in January 2009 after a loss of $5.8 billion as its customers put off spending on new equipment amid the recession. Since then, Nortel has raised about $3 billion for its creditors by selling businesses, with the patents portfolio the last of the major assets to be sold.
The case is Nortel Networks Inc., 09-10138, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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